Interbank Market Integration under Asymmetric Information

Cross-country bank lending appears to be subject to market imperfectionsleading to persistent interest rate differentials. In a modelwhere banks need to cope with liquidity shocks by borrowingor by liquidating assets, we study the scope for internationalinterbank market integration with unsecured lending when cross-countryinformation is noisy. We find that an equilibrium with integratedmarkets need not always exist, and that it may coexist withone characterized by segmentation. A repo market reduces interestrate spreads and improves upon the segmentation equilibrium.However, it may destroy the unsecured integrated equilibrium.     

Enforcing Domestic Quality Dominance through Quotas*

We study duopoly competition between a domestic and a foreign firm who first choose their quality and then compete in prices in the domestic market. As is well known, the free‐trade equilibrium exhibits quality differentiation and indeterminacy of the quality leader. We show that an import quota can enforce, as the unique subgame‐perfect equilibrium outcome, the quality ranking that favors the domestic producer and thereby can increase domestic welfare.     

The Japanese Automobile Tyre Industry under Scrutiny

This paper investigates the evolution of competition in the Japanese tyre market from 1976 to 2010 (35 years). An innovative measure of competition developed by Jan Boone is employed, as well as traditional competition indices and price–cost margin regressions, using accounting data at the firm level. Traditional indicators such as the concentration ratio and Herfindahl–Hirschman Index (HHI) suggest a very high market concentration. However, regressions using the two Boone measures and price–cost margin suggest that some competitive behavior in the Japanese tyre industry exists. By introducing dummy variables for the Sumitomo–Ohtsu merger and antimonopoly action by the Japan Fair Trade Commission, the Boone-style regressions also suggest that the merger had no impact, but the cartel breakup did have a statistically significant (p < 0.1) impact on firm’s profitability in this oligopolistic market.     

Non‐Residential Capital Stock in Latin America, 1875–2008: New Estimates and International Comparisons

We use a homogeneous method to estimate non‐residential capital stock for Argentina, Brazil, Chile, and Mexico. Our estimates extend back to the late‐nineteenth century, 50 years earlier than the present available estimates. Our estimates use the gross fixed capital formation data base (1850–1950). These data are linked with existing standardised national accounts for the region, such as those of Economic Commission for Latin America and the Caribbean. Finally, we compare investment in Latin American countries to that of advanced economies, particularly focussing on the performance of two settler countries, Argentina and Australia.     

Modelling Monetary Union in Southern Africa: Welfare Evaluation for the CMA and SADC

This paper proposes a quantitative assessment of the welfare effects arising from the Common Monetary Area (CMA) and an array of broader groupings among Southern African Development Community (SADC) countries. Model simulations suggest that (i) participating in the CMA benefits all members; (ii) joining the CMA individually is beneficial for all SADC members except Angola, Mauritius and Tanzania; (iii) creating a symmetric CMA‐wide monetary union with a regional central bank carries some costs in terms of foregone anti‐inflationary credibility; and (iv) SADC‐wide symmetric monetary union continues to be beneficial for all except Mauritius, although the gains for existing CMA members are likely to be limited.     

Environmental Management Systems in Outdoor Recreation: A Case Study of a Forest Enterprise (UK) Site

Management of environmental impacts is a key requisite to achieve sustainable tourism and recreation; and Environmental Management Systems (EMSs) provide the framework to assess, plan, act upon, control and monitor environmental management and performance. Although a large proportion of tourism and recreation sites would be in a position to work towards an EMS, few of them are aware of what they need to do to implement such systems. This case study analyses to what extent the elements of an EMS are present in the current management of a Forest Enterprise site in the UK providing outdoor recreation, promoting nature conservation and producing timber. This paper demonstrates how an EMS can be applied to put a structure to the management of a multi-purpose site, and concludes that this site, representative of other Forest Enterprise sites, can meet the basic demands of an EMS.     

Economic Reform and Behaviour of State-Owned Enterprises in Vietnam

MOCT-MOST: Economic Policy in Transitional Economies -     

How Does Imperfect Competition in the Labor Market Affect Unemployment Policies?

We consider a continuum of workers ranked according to their abilities to acquire education and two firms with different technologies that imperfectly compete in wages to attract these workers. The education cost to be borne by workers is higher in the high-technology firm. In equilibrium, we show that the unemployed workers are those with the lowest initial abilities. We then study different policies that subsidize either education cost or wages. We found that the first-best allocation can only be implemented by selective policies. We analyze second-best nonselective policies and show that, in terms of welfare, subsidizing education costs or wages is strictly equivalent.     

From ‘Great’ Leaders to Building Networks: The Emergence of a New Urban Leadership in Southern Europe?

This article reviews the changes that have taken place in local government leadership in France and Spain. It has been argued that political leadership in local government in Southern Europe is characterized by major political leaders who are able to obtain resources from central government through their political connections. However, both French and Spanish local governments have evolved while developing new forms of leadership that are more connected to territory, its people and local issues than to the respective administrative capitals. The article argues that the development of new policies at the local level, the opening of new avenues of citizen participation and the introduction of new methods of public management have changed the relationship between elected representatives and the people. Institutional innovations at the supra‐municipal level have also created a space between regions and municipalities for local leaders to develop their capacity as project leaders and network creators. Cet article examine les changements survenus au niveau de l'autorité gouvernementale locale en France et en Espagne. L'autorité politique dans un gouvernement local du sud de l'Europe se caractérise, assure‐t‐on, par de grands leaders politiques capables d'obtenir des ressources du gouvernement central grâce à leurs relations. Pourtant, les gouvernements locaux français et espagnols ont évolué tout en élaborant des formes originales de leadership, plus proches du territoire, de sa population et des affaires locales que les capitales administratives concernées. La conception de politiques publiques novatrices au plan local, l'ouverture d'autres accès à la participation des citadins et l'introduction de nouvelles méthodes de gestion publique ont modifié le rapport entre représentants élus et population. De plus, des innovations institutionnelles au niveau supra‐municipal ont généré un espace entre régions et municipalités permettant aux leaders locaux de développer leurs aptitudes en tant que chefs de projet et créateurs de réseaux.