Collective Bargaining and Wage Dispersion in Europe

The level at which collective bargaining takes place is usually considered important in determining wage levels and wage inequalities. Two different situations are considered: a first in which bargaining is only ‘multi‐employer’, and a second in which it is ‘multi‐level’, in the sense that workers can be covered by both a ‘multi‐employer’ and a ‘single‐employer’ contract at the same time. The purpose of this paper is to analyse the impact of these different institutional settings on pay dispersion. The study is carried out using the European Structure of Earnings Survey, which is a large dataset containing detailed matched employer–employee information for the year 1995. The countries analysed are Italy, Belgium and Spain. The empirical results generally show that wages of workers covered by only a ‘multi‐employer’ contract are no more compressed than those of workers covered by both ‘multi‐employer’ and ‘single‐employer’ contracts. This implies that where workers are not covered by single‐employer bargaining, they receive wage supplements paid unilaterally by their employers.     

Integrated assessment of water framework directive nitrate reduction measures

This article illustrates a statistical approach for deriving farm economic impacts of policy options aiming to reduce nitrate diffuse pollution. Building upon Fezzi et al. (2008) , who assess the costs of Water Framework Directive‐related measures on farm accounts data, we estimate regression models allowing such costs to be predicted for any region for which land use patterns and livestock numbers are known. We derive economic impacts in terms of changes in farm gross margin for (a) reducing inorganic fertilizer application, (b) reducing livestock stocking rates, and (c) converting arable land to ungrazed grassland. A case study of the agriculturally diverse Yorkshire Derwent catchment, in the North of England, demonstrates the overall approach. In addition, for this illustration, we combine these cost estimates with prediction of the water quality changes arising from each measure, derived via an integrated hydrological model of the Derwent. This allows a comparison of cost‐effectiveness. Finally, we implement our spatially explicit approach to target the measures to specific subcatchments identified as being of particular environmental policy interest.     

Income Diversification and Bank Performance: Evidence from Italian Banks

Using annual data from Italian banks, we study the link between non-interest revenues and profitability. We find that income diversification increases risk-adjusted returns. Our results provide econometric evidence consistent with current studies on EU banks, but do not support findings on the U.S. experience. In our view, the differences depend primarily on the relative importance of local banks: we find that the relation is stronger at large banks. In addition, we find that there are limits to diversification gains as banks get larger. Small banks can make gains from increasing non-interest income, but only when they have very little non-interest income share to start with. The source of non-interest income is less important than its level.

Well-posedness and invariant measures for HJM models with deterministic volatility and Lévy noise

We give sufficient conditions for the existence, uniqueness and ergodicity of invariant measures for Musiela's stochastic partial differential equation with deterministic volatility and a Hilbert space valued driving Lévy noise. Conditions for the absence of arbitrage and for the existence of mild solutions are also discussed.     

Intra-Industry Gaps in Technology and Investments in Technological Capabilities: Firm-level evidence from Chile

This paper develops a theoretical framework to analyse intra-industry gaps in technology, and tests it with enterprise-level data from a developing country. Following neoclassical theory, the existence of inter-firm technological gaps is explained by factor market segmentation that determines different factor prices and therefore different firms' technological choices. However, intra-industry gaps in technology may also result from the nature of the process of technological development, and from the different level of investments in technological capabilities.The empirical analysis is based on a sample of 338 industrial enterprises from Chile, and shows that it is possible to define technological thresholds, characterised by significant shifts in technology, independently of factor market segmentation. The analysis focuses on five major sectors: food processing, textile and garments, woodworking, metalworking and paper. Firms with different levels of technological complexity coexist within the same industry, and differences in technology are discrete, with different clusters sharing similar characteristics within the same industry. These results also have important policy implications for industrial development, which are drawn in a final section.     

Environmental innovation policy and international competition

We consider one polluting industry in an open economy. The national government implements a policy of industrial pollution control, by inducing appropriate technological innovation to reduce toxic emissions. The emission-reducing innovations are developed through firm-specific costly investments. Under different hypotheses on market structure (perfect competition, Bertrand and Cournot oligopoly), international competition forces the national government to subsidize innovation. The appropriate subsidy scheme varies according to the information available to the government and according to market structure. If information is asymmetric, the subsidy must include the information premium necessary to separate different types of firms.     

An Empirical Study of the Impact of Corruption on Environmental Performance: Evidence from Panel Data

This paper extends the empirical debate on the effects of corruption on environmental degradation by considering a recently available measure of environmental quality, the Environmental Performance Index. This indicator is more comprehensive than the measures of air pollutant emissions commonly used in the literature and, in particular, can also capture the impact of pollution on human health. This allows for a better understanding of the actual effects of a wide range of human activities on the ecosystem. From a panel data analysis, two regularities emerge. First, corruption deteriorates the overall environmental quality. This effect is robust and persistent. Second, our findings highlight the improvement of environmental quality as income rises, even at an initial level of development. This is not in contradiction with the EKC hypothesis because an increase in income levels provides positive externalities on the whole environmental quality by compensating the mere negative effects induced by industrialization on the emission levels. As a consequence, in emerging economies, policies fighting corruption and enhancing development are very likely to improve the environmental performances.     

Fixed-mobile integration

Fixed-line incumbents often also own the largest mobile network. We consider the effect of this joint ownership on market outcomes. Our model predicts that while fixed-to-mobile call prices to the integrated mobile network are more efficient than under separation, those to rival mobile networks are distorted upwards, amplifying any incumbency advantage. This result is robust to changes in the competitiveness of the fixed market and to the presence of fixed-mobile substitution. As concerns potential remedies, a uniform off-net pricing constraint leads to higher welfare than functional separation, and even allows to maintain some of the efficiency gains.     

Forecasting and combining competing models of exchange rate determination

This article investigates the out-of-sample forecast performance of a set of competing models of exchange rate determination. We compare standard linear models with models that characterize the relationship between exchange rate and the underlying fundamentals by nonlinear dynamics. Linear models tend to outperform at short forecast horizons especially when deviations from long-term equilibrium are small. In contrast, nonlinear models with more elaborate mean-reverting components dominate at longer horizons especially when deviations from long-term equilibrium are large. The results also suggest that combining different forecasting procedures generally produces more accurate forecasts than can be attained from a single model.     

Use values and exchange values in Marx’s extended reproduction schemes

Abstract

Marx-Engels’ numerical illustrations of the extended reproduction suggest that a two-sector economy reaches a balanced growth path, from the second period onwards. We explain this surprising result and show that for technical reasons, disproportions between sectors can prevent the system from reproducing itself. But, in Marx’s reproduction schemes, such a crisis is not only due to purely technical factors and one must wonder what role is played by the relative price in the reproduction of the system. The answer is given by comparing two models having a similar structure but quite different rules for the determination of the relative price. In Marx’s model, the price is given by the labour values and thus, it is exogenously fixed. We contrast Marx’s analysis with an endogenous price model in which the price depends on the conditions of the accumulation of capital. The Appendices point out the complete accordance of Engels’ corrections with Marx’s model and Marx’s unfruitful quest for a balanced growth path as a tool for the analysis of crises.