WILL THE “TRUE” LABOR SHARE STAND UP? AN APPLIED SURVEY ON LABOR SHARE MEASURES

Labor's share of income is a key variable in economics. It plays a leading role in analysis of (in)equality, globalization, technical change, growth theories, etc. Notwithstanding this broad application, there are many different definitions of the labor share. Understanding and synthesizing those differences is the purpose of this applied survey. Empirical measures may vary reflecting the allocation of income components that cannot be directly ascribed to capital or labor. We examine the alternative assumptions made in the literature in this regard and quantify and motivate the resulting discrepancies. Focusing (mostly) on US data, we show that different measures can have very distinct properties in terms of the observed stochastic trends, shares of short‐, medium‐, and long‐run variation and volatilities, persistence and mean‐reversion properties, and susceptibility to structural breaks. For instance, while “short‐run” properties of the surveyed labor share measures are relatively consistent across all definitions (and countercyclical), their “medium‐” and “long‐run” trends may diverge substantially (and are procyclical). To substantiate our analysis, we document the implications of discrepancies in the empirical labor share definition for growth accounting, analyzing the effect of technology shocks, and for estimating inflation dynamics.     

Sources of productivity differentials in manufacturing in post-transition urban South-East Europe

The paper analyses the effects of urbanization and localisation economies on manufacturing firms’ productivity across urban landscapes in post-transition South-East European (SEE) countries. Fixed-effects panel data estimations on a large sample of firms show that the factors accounting for productivity advantages of manufacturing firms in urban post-transition SEE are related to the firms and to the environment in which these firms operate. Firms located in diversified cities benefit from a productivity premium generated in this type of agglomeration, while no evidence was found that the relative specialization across industries has any effect on firm productivity levels.     

Enforcement Activity in Consumer Protection Regulation in Croatia

The law regulating consumer protection in the Republic of Croatia began its intensive development through the process of harmonization of Croatian legislation with EU law. Apart from the approximation of Croatian legislation with the acquis, in the pre-accession process, Croatia also undertook obligations to introduce and develop corresponding mechanisms for the efficient enforcement of consumer protection in practice. The development of consumer protection policy was recognized as a priority area in Croatia, and even before full membership, the process of implementing new directives in the area of consumer protection ran almost in parallel to and at the same pace as that of the Member States. Alongside the harmonization of its legislation with the EU consumer acquis, Croatia started developing a regulatory enforcement structure, including a whole series of mechanisms to achieve individual and collective protection of consumer rights. Among other things, the satisfactory development of regulatory enforcement activities in consumer protection was one of the preconditions for the successful completion of the accession negotiations and for signing the accession treaty. At the same time, the article suggests that in the area of both the individual and collective realization of consumer protection, there is a need for further progress through, on the one hand, developing administrative capacities and enhancing access to justice, as well as developing a system of out-of-court settlement of consumer disputes on the other.     

Impact of an unexplained component of real exchange rate volatility on FDI: Evidence from transition countries

The aim of this paper is to examine the impact of an unexplained component of real exchange rate volatility on FDI in transition economies. We make an attempt to overcome some problems associated with previous studies; the aggregation problem, inadequate measures of volatility, short-run focus and the endogeneity problem. Using a GARCH specification, we focus on long-run volatility, while we control for the endogeneity problem by applying SYS-GMM estimation. The obtained results show that the impact of the unexplained component of real exchange rate volatility on FDI differs among economic activities since 2000. As part of the re-estimation exercise, we use two alternative measures of volatility to avoid arbitrariness. The obtained results are to a large extent in accordance with the first one.     

Patient care,satisfaction and service quality in health care

It is becoming increasingly important in the healthcare setting to treat patients as consumers and measure their satisfaction with medical services rendered. As such, patient satisfaction should be considered an important output of a country's healthcare system, basically reflecting the stage of its development. The conducted study tested students’ satisfaction with the quality of service provided by student polyclinics. In particular, the study has analysed the impacts of personal relationships, promptness and tangibility on student satisfaction. The findings imply that all three factors significantly affect patient satisfaction, with personal relationships having the strongest impact. Such results suggest that healthcare providers should encourage their doctors to devote more time to their patients and show genuine concern for patients’ problems if they wish to improve overall satisfaction of their patients with the delivered services.     

The Global Extent of the Great Moderation*

In 2008 the US financial crisis spilled over into a number of other economies causing declines in GDP across the world. Yet the decades preceding the current downturn had been a period of unprecedented stability for the US economy. This article examines annual data for 98 countries over the period 1961–2007 and finds that lower GDP growth volatility in the period preceding the current crisis was not confined to the US. It is detected in a number of developed and developing countries, suggesting that a reduction in volatility in this period was a more general phenomenon.     

ON AGENT’S AGREEMENT AND PARTIAL‐EQUILIBRIUM PRICING IN INCOMPLETE MARKETS

We consider two risk‐averse financial agents who negotiate the price of an illiquid indivisible contingent claim in an incomplete semimartingale market environment. Under the assumption that the agents are exponential utility maximizers with nontraded random endowments, we provide necessary and sufficient conditions for negotiation to be successful, i.e., for the trade to occur. We also study the asymptotic case where the size of the claim is small compared to the random endowments and we give a full characterization in this case. Finally, we study a partial‐equilibrium problem for a bundle of divisible claims and establish existence and uniqueness. A number of technical results on conditional indifference prices is provided.     

Noise and aggregation of information in large markets

We study the relation between noise (liquidity traders, endowment shocks) and the aggregation of information in financial markets with large number of agents. We show that as long as noise increases with the number of agents, the limiting equilibrium is well-defined and leads to non-trivial information acquisition, even when per-capita noise tends to zero. In such equilibrium risk sharing and price revelation play different roles than in the standard limiting economy in which per-capita noise is finite. We apply our model to study information sales by a monopolist, and information acquisition in multi-asset markets, showing that it leads to qualitatively different results with respect to those in the existing literature. Our conditions on noise are shown to be necessary and sufficient to have limiting economies with perfectly competitive behavior consistent with endogenous information acquisition.     

Grocery Store Attributes in Recovering Economies: An Empirical Investigation of Their Importance,Using Three-Component Contour Plotting

The authors share results of a study conducted to measure the attributes of grocery stores that are the most important for consumers in a market recovering from war and transitioning to a market economy. Applying a trilinear coordinate plot, the authors develop a model that consists of those attributes. The findings led to conclusions that services and location, rather than the historically favored attribute of price, increasingly are key factors affecting store choice. Managerial implications are discussed and future research directions are suggested.