On a monotonicity property of the Klein-Rubin true cost-of-living index

It is shown that the Klein-Rubin true cost-of-living index associated with the Stone-Geary Linear Expenditure System has a highly restrictive feature. When used to measure the impact of relative price changes on different income (expenditure) groups, the index numbers will always be monotonic in income.     

The Role of Ideas in Understanding Industrial Relations Policy Change in Liberal Market Economies

This paper analyzes the uneven processes underpinning industrial relations policy liberalization in New Zealand, Australia, the UK, and Ireland. Drawing upon 140 elite interviews and building upon ideational comparative political theories, the paper highlights the role of ideas in the policy change process. It identifies how particular ideas can be used to construct policy problems, how these ideas can gain legitimacy through battles with competing ideas, and how policy legacies can influence whether ideas take root. The findings from the comparative case analysis expose a critical difference between “positive legacies” and “negative legacies” to account for different liberalization trajectories.     

The Returns to Education: Microeconomics

In this paper we focus on education as a private decision to invest in "human capital" and the estimation of the rate of return to that private investment. While the literature is replete with studies that estimate the rate of return using regression methods where the estimated return is obtained as the coefficient on a years of education variable in a log wage equation that contains controls for work experience and other individual characteristics, the issue is surrounded with difficulties. We outline the theoretical arguments underpinning the empirical developments and show that the evidence on private returns to the individual is compelling. Despite some of these issues surrounding the estimation of the return to schooling, our evidence, based on estimates from a variety of datasets and specifications, is that there is an unambiguously positive effect on the earnings of an individual from participation in education. Moreover, the size of the effect seems large relative to the returns on other investments.     

Equilibrium participation in public goods allocations

We consider a notion of voluntary participation for mechanism design in public goods economies in which mechanisms select public goods allocations and individuals then choose whether or not to submit their requested transfer to the central planner. The set of allocations that are robust to non-participation is shown to be sub-optimal in a wide variety of environments and may shrink to the endowment as the economy is replicated. When agents become small as the economy becomes large, any non-trivial mechanism suffers from non-participation when agents cannot be coerced to contribute.     

Individualism and collectivism revisited: a study of black and minority ethnic women

This article seeks to add discussion of the intersection of gender and ethnicity to the debates on individualism and collectivism. In doing so, it challenges the prevailing view, in these debates, of the rise of individualism and the decline in collectivism. Through a study of black and minority ethnic women trade unionists, it shows how a differentiated workforce, rather than leading to individualism at work, may contribute to union renewal and inspire more creative forms of collectivism.     

The relative influence of price and non-price factors on short-term retail deposit quantities?

This study explores how price and non-price factors influence change in the quantity of short-term retail deposits held by depository institutions. The analysis is undertaken for a sample of UK building societies over 23 years using a disaggregated data set with a two-stage econometric procedure involving system estimators in a panel framework using seemingly unrelated regression, generalised method of moments and an ordinary least-squares fixed effects estimators to control for contemporaneous correlation and endogeneity concerns. Price factors examined include the policy or base rate and retail deposit interest rates set by individual building societies and non-price factors including the branch network and the number of deposit accounts offered by individual building societies. The cost of funds, one non-price factor and occurrence of mergers are consistently significant influences of retail deposit quantities. We conclude risk assessment of retail deposit quantity and monetary policy transmission would benefit from considering both price and non-price factors, rather than only price factors.     

Market competition,earnings management,and persistence in accounting profitability around the world

We examine how cross-country differences in product, capital, and labor market competition, as well as earnings management affect mean reversion in accounting return on assets. Using a sample of 48,465 unique firms from 49 countries, we find that accounting returns mean revert faster in countries where there is more product and capital market competition, as predicted by economic theory. Country differences in labor market competition and earnings management are also related to mean reversion in accounting returns—but the relation varies with firm performance. Country labor competition increases mean reversion when unexpected returns are positive but slows it when unexpected returns are negative. Accounting returns in countries with higher earnings management mean revert more slowly for profitable firms and more rapidly for loss firms. Thus earnings management incentives to slow or speed up mean reversion in accounting returns are accentuated in countries where there is a high propensity for earnings management. Overall, these findings suggest that country factors explain mean reversion in accounting returns and are therefore relevant for firm valuation.     

Gender Pay Gap,Voluntary Interventions and Recession: The Case of the British Financial Services Sector

State institutions and trade unions put pressure on the British financial services sector to reform its gendered practices and reduce its gender pay gap following both the recession and the Equality and Human Rights Commission (EHRC) Inquiry (2009). This article considers the effect of these pressures by comparing the gender pay gap pre‐, during‐ and post‐recession periods. Using Labour Force Survey data, the article finds a marginal pay gap reduction in the post‐recession period, a reduction that was greater in financial services than in the rest of the economy. However, the financial services pay gap remained resilient and substantially higher at the top of the earnings distribution. Union membership and collective bargaining were shown to reduce the pay gap including for women members with children. In contrast, countervailing factors, including ethnicity and post‐recession longer working hours, contributed to the pay gap. The study reveals the limitations of voluntary interventions against a resilient gendered culture.     

A structural portfolio balance model of the Sterling-Dollar exchange rate

Zusammenfassung Ein Strukturmodell des verm?genstheoretischen Ansatzes zur Erkl?rung des Pfund-Dollar-Wechselkurses. — In diesem Aufsatz wird eine Variante des verm?genstheoretischen Ansatzes zur Bestimmung des Wechselkurses in seiner Strukturform auf den Pfund-Dollar-Kurs des Zeitraums 1973–1982 angewandt. Dabei wird die Methodologie von Brainard und Tobin benutzt, wodurch sichergestellt wird, da\ die Koeffizienten bestimmten Restriktionen genügen. Gesch?tzt wird das Modell sowohl mit der Kleinst-Quadrate-Methode als auch mit dem Theil-Goldberger-Verfahren der gemischten Sch?tzungen. Mehrere Aktiva-Schocks werden simuliert und die Reaktionen der Zinss?tze und der Wechselkurse aufgezeigt.

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Résumé Un modèle structurel de ?portfolio balance? du taux de change Sterling-Dollar.- Dans cet article les auteurs appliquent la structure d’une version de l’approche de ?portfolio balance? à la détermination du taux de change sterling-dollar sur la période 1973–1982. Dans le modèle, la méthodologie de Brainard et Tobin est utilisée qui garantit que les restrictions nécessaires d’addition sont satisfaites. Les méthodes des moindres carrés ordinaires aussi bien que les procédures d’estimation mixte de Theil-Goldberger sont appliquées pour estimer le modèle. Les auteurs simulent un nombre des chocs d’actif et illustrent la réponse des taux d’intérêt et du taux de change.

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Resumen Un modelo ?portfolio balance? estructural del tipo de cambio entre la libra esterlina y el dólar. - En este trabajo se presenta una versión del modelo de ?portfolio balance? para determinar el tipo de cambio, que es implementado estructuralmente para el tipo libra esterlina - dólar en el período 1973–1982. En la implementación de este modelo se utiliza la metodología de Brainard y Tobin, que garantiza la consistencia de las restricciones. Con el fin de estimar el modelo se aplica tanto el método de cuadrados mínimos como también el método mixto de Theil y Goldberger. Se llevan a cabo varias simulaciones a base de shocks de activos para ilustrar la reacción de las tasas de interés y del tipo de cambio.