Soviet subsidization of Eastern Europe: The primacy of economics over politics?

The level and distribution of Soviet subsidies to various East European countries, which Marrese and Vaňous attribute in their book Soviet Subsidization of Trade with Eastern Europe: A Soviet Perspective to political considerations, are explained here as, for the most part, the normal outcomes of the economic integration of a bloc with relative resource endowment differing from those obtaining in the rest of the world. The statistical methods used by Marrese and Various to calculate the subsidies are also criticized.     

China''s exchange rate and the balance of trade

This paper examines the responsiveness of the balance of trade of the People's Republic of China to the real exchange rate. We find that, in both the short-run and the long-run, devaluation serves to improve the balance of trade. Using quarterly data for 1980:I to 1989:IV we show that the bulk of the response to devaluation occurs over a one year period, with noJ-curve effect. These results suggest that the two-tier price system and other measures to liberalize the Chinese economy have made the exchange rate an effective indirect tool for regulating trade.     

Convergence on the Market?

The economics of public choice indicates that in political systems with two main parties their policies tend to converge. Professor Josef Molsberger, of the University of Tübingen, reviews the convergence between the German Christian and Social Democrats and reflects on the prospects for convergence in the UK.     

Labour market institutions and the industry wage distribution

The paper studies the industry wage structures of Austria, Norway, the union sector of the U. S. as well as the non-union sector of the U. S. We make comparable regressions for each country, and are thus able to compare the sectoral earnings patterns controlling for the usual individual characteristics. Our results confirm the hypothesis that the pattern of the inter-industry pay structure is largely independent of labour market institutions: High paying industries in a non-union environment tend to pay high wages also in regimes where bargaining is very centralised and coordinated.This, however, does not mean that collective bargaining does not matter. The influence is mainly on the amount of wage dispersion: We find considerably lower industry pay gaps in centralised Austria and Norway than in decentralised U. S. Within the U. S., pay differentials within the union sector slightly exceed those of the non-union sector.The results give support to non-competitive explanations of the labour market. If efficiency wage mechanisms are the reason for wage differentials we expect central bargainers to internalise these effects. Competitive explanations, on the other hand, would predict no difference between the non-union outcome and a central agreement aiming at achieving full employment.This work was conducted while we were both affiliated with the University of California at Berkeley, and we thank the Institute of Industrial Relations at the University of California, Berkeley, for its support and hospitality. The research was supported by the Austrian Fonds zur Förderung der wissenschaftlichen Forschung under the project JO548-SOZ (Zweimüller) and the Norwegian NORAS under the LOS program (Barth). A preliminary version of the paper was presented at the Labour Seminar at the University of California, Berkeley. We thank the participants, especially Bill Dickens and Jonathan Leonard for valuable comments. We are indebted to Bill Dickens also for giving us access to the U. S. data set CPS 1983. Thanks also to Herbert Walther for useful comments.     

‘Fair Value’ of Core Deposits in the EU version of IFRS: A Critical Review

The paper presents seven impacts of the introduction of core deposits models in credit institutions into International Financial Reporting Standards (IFRS). First, the equity of the credit institution will be higher for the core deposit premium adjusted for deferred tax. Second, the models make it possible for some financial instruments (e.g., interest rate swaps where the credit institution receives fixed payments and pays floating payments) to be designated as hedging instruments. Third, there is lower comparability of financial statements, as no standard business model of core deposits exists. Fourth, the models can be understood at the next step of relaxing of prudence (conservatism) and neutrality of IFRS. Fifth, there is inconsistency in the core deposit definition. By definition, these deposits should be stable for a long (infinite) period. Then, the present value of core deposits should be zero which is flawed. Sixth, there is inconsistency in the interest rate risk definition. Seventh, according to available information, the core deposits models have not been introduced into accounting in any national generally accepted accounting principles (GAAP) such as US GAAP. Thus the fair value of core deposits should be equal to the nominal value of these deposits. The accounting should not reflect the core deposits models. The carve‐out in the European version of IFRS should be removed.     

Exploring the link between research and economic growth: an empirical study of China and USA

In this paper, we explore the link between scientific and technical research and economic growth in China and USA over the sample period 1981–2012 using the extended Cobb–Douglas model with capital per worker and the quantity of scientific and technical journal articles (research publications) per worker. We examine the cointegration relationship and present the short-run and long-run results using the autoregressive distributed lag bounds procedure. Further, we examine the direction of causality between research publications per worker results and economic growth variables using the Toda and Yamamoto (J Econom 66(1–2):225–250, 1995) procedure. Our results indicate for both countries research publications per worker positively influence the output per worker both in the short-run and the long-run. The causality results for China indicate a bi-directional causality between research publications per worker and output per worker, duly emphasizing the mutually reinforcing effect. In case of USA, we note a unidirectional causation output per worker to research publications per worker indicating that output Granger cause research publications.     

Unemployment and Right‐wing Extremist Crime*

It is frequently argued that unemployment plays a crucial role in the occurrence of right‐wing extremist crimes (RECs). We test this hypothesis empirically using data from Germany. We find that right‐wing criminal activities occur more frequently when unemployment is high. The substantial difference in the numbers of RECs occurring in the East and West German states can mostly be attributed to differences in unemployment. This finding reinforces the importance of unemployment as an explanatory factor for RECs, and it questions explanations based solely on the different socialization in former communist East Germany and the liberal West German states.     

Consistent Planning Under Uncertain Lifetime

This paper considers the problem of intertemporal planning when changing tastes result in inconsistent plans. This problem has been considered in the literature under the assumption of a lifetime certainty. Some of the solutions proposed in the literature exhibit certain undesirable properties such as incoherence and lack of Pareto-optimality. This paper proposes a procedure for solving the intertemporal dilemma when lifetime is uncertain. The proposed solution is coherent and Pareto-optimal, and is, in fact, valid for the case of certain as well as uncertain lifetime. [020]     

New Frontiers in Tourist Behavior Research: Steps toward Causal Inference from Non-experimental Data

Over the last two decades the range of methods for analyzing causal relationships has been significantly extended. New approaches to the theory of causality rely on the concept of “intervention” instead of “association”. Under an axiomatic framework they elaborate the conditions for safe causal inference from non-experimental data. Inferred Causation (IC) Theory combines elements of graph theory, statistics, logic and artificial intelligence research in computer science. It is not limited to parametric models in need of quantitative (ratio or interval scaled) data, but also operates much more generally on the observed conditional independence relationships among a set of qualitative (categorical) observations. Causal inferences do not appear to be restricted to experimental data. This is particularly promising for research domains such as consumer or tourist behavior where data from controlled experiments on real markets are rare. A case example highlights the potential use of Inferred Causation methodology in tourism research. It aims at measuring the direct and indirect influences of destination loyalty, perceived service quality and satisfaction on the tourist's intention to repeat visit.