Labor Market Developments in Albania: An Analytical Overview

Rising unemployment and falling living standards are two of the main problems facing policymakers in economies in transition. The case of Albania is distinctive, because high unemployment has been associated with a very large private sector and by far the greatest scale of temporary emigration compared with other transition countries in Europe. The authors develop a model that characterizes the path of unemployment in the presence of temporary emigration. They analyze the emigration decision and the factors that affect registered unemployment emigration, and highlight how changes in flow probabilities between sectors affect the time paths of registered unemployment and emigration.     

Editorial

Editorial Introduction

Editorial     

Book Reviews

M. Arsjad Anwar, Thee Kian Wie, Iwan Jaya Azis, Pemikiran, Pdaksanaan, dan Perintisan Pembangunan Ekonomi[Concepts, Implementation, and Pioneering in Economic Development], Fakultas Ekonomi Universitas Indonesia and PT Gramedia Pustaka Utama, Jakarta, 1992, pp. xx + 700.

Adam Schwarz, A Nation in Waiting: Indonesia in the 1990s, Allen and Unwin, Sydney, and Westview, Boulder, 1994, pp. 370. Paper: A$24.95.

East Asia Analytical Unit, Expanding Horizons: Australia and Indonesia into the 22st Century,Department of Foreign Affairs and Trade, Canberra, 1994, pp. xviii + 346. A$34.95.

Sjahrir, Pikiran Politik[Political Ideas], LP3ES, Jakarta, 1994, pp. xiv + 191.

Sjahrir, Persoalan Ekonomi Indonesia: Moneter, Perkreditan dan Nenca Pembayaran[Problems of the Indonesian Economy: Money, Credit and the Balance of Payments], Pustaka Sinar Harapan, Jakarta, 1995, pp. xv + 205.

Sjahrir, Analisis Bursa Efek[Analysis of the Stock Exchange], PT Gramedia Pustaka Utama, Jakarta, 1995, pp. xiv + 169.

Sjahrir, Ekonomi Indonesia dalam Perspektif Bisnis[The Indonesian Economy in a Business Perspective], PT Jurnalindo Aksara Grafika, Jakarta, 1994, pp. xvi + 239.

Sjahrir, Kebijakan Negara Mengantisipasi Masa Depan[National Policy: Anticipating the Future], Yayasan Obor Indonesia, Jakarta, 1994, pp. xv + 251.

Sjahrir, Formasi Mikro-Makro Ekonomi Indonesia[Indonesia's Macro and Micro Economy], Penerbit Universitas Indonesia, Jakarta, 1995, pp. xii + 313

F.B.A. Bouman and Otto Hospes, Financial Landscapes Reconstructed: The Fine Art of Mapping Development,Westview, Boulder, 1994, pp. xi + 416. US$45.00

Robert Cribb (ed.), The Late Colonial State in Indonesia: Political and Economic foundations of the Netherlands Indies 1880–1942,Verhandelmgen van het Koninklijk Instituut voor Taal-, Land- en Volkenkunde 163, KITLV Press, Leiden, 1994, pp. xiii + 295.

Shinya Sugiyama and Milagros C. Guerrero (eds), International Commercial Rivalry in Southeast Asia in the Inierwar Period,Yale Southeast Asia Studies Monograph 39, Yale Center for International and Area Studies, New Haven, 1994, pp. ix + 222.

W.L. Korthals Altes, Changing Economy in Indonesia. Volume 15: Prices (Non-Rice) 1814–1940,Royal Tropical Institute, Amsterdam, 1994, pp. 175. Paper: Dfl. 48.00.     

Financial,corporate and tax harmonisation for capital market development in southern Africa

An integrated capital market can significantly improve prospects for a region which seeks to accelerate its development but is critically short of the requisite capital The function of a capital market is the transformation of savings by private individuals into investment capital required by business concerns. However, the processing of transformation requires mediation between their respective interests through an effective mechanism for facilitating access to the market for capital It also requires allocational efficiency so that capital investment is directed where it is most useful and provides the best yield.

This article considers the measures that should be adopted to facilitate harmonisation leading to the growth of a regional capital market which is necessary for regional integration. It reviews trends in capital controls, corporate and financial regulatory practices and tax regimes and discusses the implications for capital mobilisation and investment. The regionalisation of capital would call for considerable convergence and coordination of policy and practice in capital control, regulatory requirements and fiscal systems.     

Gender and ethical orientation: A test of gender and occupational socialization theories

Ethics and associated values influence not only managerial behavior but also managerial success (England and Lee, 1973). Gender socialization theory hypothesizes gender differences in ethics variables whether or not individuals are full time employees; occupational socialization hypothesizes gender similarity in employees. The conflicting hypotheses were investigated using questionnaire responses from a sample of 308 individuals. Analysis of variance and hierarchical regression yielded unexpected results. Although no significant gender differences emerged in individuals lacking full time employment, significant differences existed between employed women and men, with women appearing more ethical. While occupational socialization predicts an interaction between employment status and gender, these group differences were opposite to those predicted. An implication for the two theories and the current conflicting research support is that these commonly used theories may be of limited usefulness. Some alternative concepts are proposed.E. Sharon Mason is an Assistant Professor of organizational behavior and human resource management in the Faculty of Business, Brock University, St Catharines, Ontario.Peter E. Mudrack is an Assistant Professor in the Department of Management and Organization Sciences at Wayne State University, Detroit, Michigan.     

Investor efficiency in the face of takings

Governmental entities at all levels are empowered to acquire private property for the public's benefit, provided that just compensation is paid. The level of compensation typically viewed by courts as just is market value, but questions arise as to whether market value compensation motivates the private owner of land, potentially subject to a taking, to improve the property to a degree that is socially efficient. Earlier works have found market value to be a compensation level too high to promote efficiency. The present paper offers an analysis, based on a simple model of investor profit maximization, that provides a unified view of models presented in some important earlier works. In a special application of the general case, it is shown that market value can be too low a level of compensation to promote efficient behavior by the land owner.     

Sector-specific capital, “Bang-bang” investment,and the Filippov solution

Bang-bang investment in a two-sector growth model with immobile capital is rational and leads to a unique and globally stable long-run equilibrium along a sliding trajectory. This steady state coincides with the stationary equilibrium in the traditional model with non-sector-specific capital.This article was written while the authors were visiting scholars at Cornell University. We gratefully acknowledge financial assistance from the Erasmus University Trust Fund and the Netherlands Scientific Organization. We would like to thank, without implicating, two anonymous referees, Martijn Herrmann, Jean-Marie Viaene, Claus Weddepohl, and the participants of seminars at the University of Maryland, the University of Montreal, and Erasmus University Rotterdam for perceptive remarks and useful comments. Jeroen Hinloopen and Rien Wagenvoort provided able graphical assistance. The views expressed in this article are those of the authors and not necessarily those of the World Bank.     

Jackknifing Bond Option Prices

Prices of interest rate derivative securities depend cruciallyon the mean reversion parameters of the underlying diffusions.These parameters are subject to estimation bias when standardmethods are used. The estimation bias can be substantial evenin very large samples and much more serious than the discretizationbias, and it translates into a bias in pricing bond optionsand other derivative securities that is important in practicalwork. This article proposes a very general and computationallyinexpensive method of bias reduction that is based on Quenouille's(1956; Biometrika, 43, 353–360) jackknife. We show howthe method can be applied directly to the options price itselfas well as the coefficients in the models. We investigate itsperformance in a Monte Carlo study. Empirical applications toU.S. dollar swap rates highlight the differences between bondand option prices implied by the jackknife procedure and thoseimplied by the standard approach. These differences are largeand suggest that bias reduction in pricing options is importantin practical applications.     

An Analysis of SBA Loan Defaults by Maturity Structure

The financial intermediation literature on small business lending focuses on the determinants and costs to credit access. There is, however, little research examining the repayment behavior of small firms that actually receive loans. In this paper, we address this shortcoming in the literature by examining the default behavior of a sample of Small Business Administration 7(a) guaranteed loans with three distinct maturity structures. We employ a discrete-time hazard approach and show that SBA defaults are time-dependent and that the factors impacting default behavior, as well as its timing, are maturity specific. Specifically, we show the importance of loan maturity, seasoning, economic conditions, and other firm-specific factors in predicting the likelihood of SBA loan defaults. JEL classification: G21     

Hedging Housing Risk*

An unusually rich source of data on housing prices in Stockholm is used to analyze the investment implications of housing choices. This empirical analysis derives market-wide price and return series for housing investment during a 13-year period, and it also provides estimates of the individual-specific, idiosyncratic, variation in housing returns. Because the idiosyncratic component follows an autocorrelated process, the analysis of portfolio choice is dependent upon the holding period. We analyze the composition of household investment portfolios containing housing, common stocks, stocks in real estate holding companies, bonds, and t-bills. For short holding periods, the efficient portfolio contains essentially no housing. For longer periods, low-risk portfolios contain 15 to 50 percent housing. These results suggest that there are large potential gains from policies or institutions that would permit households to hedge their lumpy investments in housing. We estimate the potential value of hedges in reducing risk to households, yet yielding the same investment returns. The value is surprisingly large, especially to poorer homeowners.