Mexico's Financial Sector Crisis: Propagative Linkages to Devaluation

The sharp 1994 Mexican peso devaluation was followed by a financial-sector crisis, forcing the Mexican government to retake control of several banks and to grant substantial assistance to many others. This paper tests several hypotheses concerning the impact of devaluation. First, event-study methodology is used to test whether some sectors of Mexican economy were 'devaluation-gaining' while others were 'devaluation-losing'. Second, we test whether devaluation shocks were transmitted to the financial sector through the liability side versus the asset side of bank balance sheets. Our results indicate the importance of asset diversification.     

Frontiers of Climate Change Economics

The potential of taxes to correct environmental externalities has long been recognized among economists. Yet, this welfare-enhancing policy commonly faces strong opposition by citizens. Conversely, externality-correcting subsidies frequently enjoy high public support. We conduct a lab experiment to explore public support for Pigouvian taxes and subsidies. In an experimental market with a negative externality, participants vote on the introduction of Pigouvian taxes and subsidies under full or reduced information concerning how the tax revenues will be spent and the subsidy paid for. Theoretically the two instruments should produce identical outcomes. However, we find substantially greater support for subsidies than for taxes. This can partially be explained by the participants’ expectation that the subsidy will increase their own payoffs more than a tax, but not because it is expected to be more effective in changing behavior. Furthermore, we find that with greater uncertainty, the preference for subsidies is even stronger, a result which is consistent with loss aversion.     

The aggregate labor market effects of the Swedish Knowledge Lift program

The Swedish adult education program known as the Knowledge Lift (1997–2002) was unprecedented in its size and scope, aiming to raise the skill level of large numbers of low-skill workers. This paper evaluates the potential effects of this program on aggregate labor market outcomes. This is done by calibrating an equilibrium search model with heterogeneous worker skills using pre-program data and then forecasting the program impacts. We compare the forecasts to observed aggregate labor market outcomes after termination of the program.     

Transformational change and leader character

Leader character is foundational to good leadership. We define character as an amalgam of virtues, values, and personality traits that influence how leaders behave in various contexts. Our research identified 11 dimensions of leader character and 60-plus character elements that are illustrative of those dimensions. We integrate two frameworks: John Kotter’s eight-step model of leading change and our framework of leader character dimensions and associated elements. Specifically, the objective of this article is to illustrate which dimensions of leader character come into play at various points in the organizational change process and how their presence or absence affects the outcomes of the change process. Beyond that, we draw inferences about how organizations might develop character among all leaders but especially those younger, less experienced leaders who will become tomorrow’s leaders of change projects.     

欧盟海关税则归类的政治经济学

海关税则归类是一国贸易政策中极为重要的一个元素。因为它能以多种方式影响一国的贸易政策,因此各国便有动力为了贸易保护而对其进行操纵。当然,关税税则的改变可能是由于新产品的引入或者新技术的发明,     

Alternative approaches to evaluation in empirical microeconomics

Four alternative but related approaches to empirical evaluation of policy interventions are studied: social experiments, natural experiments, matching methods, and instrumental variables. In each case the necessary assumptions and the data requirements are considered for estimation of a number of key parameters of interest. These key parameters include the average treatment effect, the treatment on the treated and the local average treatment effect. Some issues of implementation and interpretation are discussed drawing on the labour market programme evaluation literature.JEL Classification: J21, J64, C33Correspondence to: Richard BlundellThis review was prepared for the special microeconometrics PEJ. Comments from the editors, the referee and participants at the CeMMAP conference at which the papers for this volume were presented are gratefully acknowledged. The research is part of the program of the ESRC Centre for the Microeconomic Analysis of Fiscal Policy at IFS. Financial support from the ESRC is gratefully acknowledged. The second author also acknowledges the financial support from Sub-Programa Ciência e Tecnologia do Segundo Quadro Comunitário de Apoio, grant number PRAXIS XXI/BD/11413/97. The usual disclaimer applies.     

Strategic Mutual Learning Between Producing and Buying Firms During Product Innovation

The product innovation activities and strategies employed by successful innovators often differ from those used by firms having more mature products. Marketing strategies for innovating firms can vary along two dimensions of knowledge: technological development (stable and evolving) and market needs (known and emerging). In addition, producers often commit to forms of strategic relationships with their buyers because of the difficulties encountered when buying firms adopt and implement technological innovations. Starting with these two orienting constructs from the literature, Patricia Meyers and Gerard Athaide describe the kinds of learning that develop between producers and buyers when markets for a technological innovation are forming.     

A Reduced Rank Regression Approach to Tests of Asset Pricing

Both the Arbitrage Pricing Theory (APT) and the Capital Asset Pricing Model (CAPM) place restrictions of the cross-sectional variation of conditional expectations of asset returns and of macro indicators. We show that these restrictions imposed on the reference statistical models lead to special cases of the reduced rank regression model. The maximum likelihood problem is solved by canonical correlation analysis. Likelihood ratio tests about the number of factors underlying stock returns are straightforward to calculate, thus allowing discrimination between competing financial theories. Moreover LR tests on the relevance of each macroeconomic indicator within a chosen model can be implemented. Some of the tests are illustrated by an application to Italian stock market data.