Corporate Finance and the Monetary Transmission Mechanism

We analyze the transmission effects of monetary policy in ageneral equilibrium model of the financial sector, with banklending and securities markets. Bank lending is constrainedby capital adequacy requirements, and asymmetric informationadds a cost to outside bank equity capital. In our model, monetarypolicy does not affect bank lending through changes in bankliquidity; rather, it operates through changes in the spreadof bank loans over corporate bonds, which induce changes inthe aggregate composition of financing by firms, and in banks’equity-capital base. The model produces multiple equilibria,one of which displays all the features of a "credit crunch."     

Impacts of Immigration on an Ageing Welfare State: An Applied General Equilibrium Model for France

Immigration is often seen as an instrument of adaptation for ageing countries. In this paper, we evaluate, using a dynamic general equilibrium model, the contribution of migration policy in reducing the tax burden associated with the ageing population in France. Four alternative scenarios, compared with a baseline scenario based on official projections, are simulated with the aim of quantifying the effects of immigration on French social protection finances. We show that the age and, to a lesser extent, the skill structure of immigrants are the key features that mainly determine the effects on social protection finances. Overall, these effects are all the more positive in the short to medium term if the migration policy is selective (in favour of more skilled workers). In the long term, the beneficial effects of a selective policy may disappear. But whatever the degree of selectivity of the migration policy, the financial gains from higher consequent migration flows are relatively moderate compared with the demographic changes implied by ageing.     

Experienced versus decision utility: large-scale comparison for income–leisure preferences*

Subjective well-being (SWB) data are increasingly used to perform welfare analysis. Interpreted as “experienced utility”, it has recently been compared to “decision utility” using small-scale experiments most often based on stated preferences. We transpose this comparison to the framework of non-experimental and large-scale data commonly used for policy analysis, focusing on the income–leisure domain where redistributive policies operate. Using the British Household Panel Survey, we suggest a “deviation” measure, which is simply the difference between actual working hours and SWB-maximizing hours. We show that about three-quarters of individuals make decisions that are not inconsistent with maximizing their SWB. We discuss the potential channels that explain the lack of optimization when deviations are significantly large. We find proxies for a number of individual and external constraints, and show that constraints alone can explain more than half of the deviations. In our context, deviations partly reflect the inability of the revealed preference approach to account for labor market rigidities, so the actual and SWB-maximizing hours should be used in a complementary manner. The suggested approach based on our deviation metric could help identify labor market frictions.     

Promoting green tourism: the future of environmental awards

Awards and labels can help consumers choose more environmentally benign tourism products and encourage more attention to the environment by producers. As in other areas, however, there is an increasing clutter of environmental awards and labels in tourism. Concerns exist about the value and appropriateness of some claims associated with these. This paper reviews and assesses environmental awards in tourism and recreation using comparative analysis. Sixteen awards relating to manufacturing, forestry, tourist attractions and tourism companies are appraised under the classifications of focus, criteria, certification system and results. Having identified the strengths and weaknesses of different approaches it is concluded that the time is ripe to rationalise awards and labels in the tourism industry and that an environmental management systems approach provides a flexible template to fulfil such a need and drive the agenda of environmental improvements in the industry. Copyright © 2001 John Wiley & Sons, Ltd.