Long memory and mean reversion in real exchange rates in Latin America

This article examines the long-run Purchasing Power Parity (PPP) hypothesis for 12 Latin American Real Effective Exchange Rates (REERs) using fractional integration techniques. The empirical results, applying parametric approaches, provide evidence of mean reversion in the REERs in the cases of Nicaragua, Belize, Costa Rica, Guyana and Paraguay and lack of it for the remaining seven countries. Employing semiparametric methods, the evidence of mean reversion covers the following countries: Belize, the Dominican Republic, Ecuador and Mexico. Thus, only for Belize and Guyana do we obtain consistent evidence of mean reversion in the real exchange rates. At the other extreme, lack of mean reversion, and thus, lack of PPP, is obtained with both methods in Bolivia, Brazil, Colombia and Venezuela. For the remaining six countries, the results are ambiguous. The results for the PPP theory in Belize and Guyana may show the importance of promoting policies based on exchange rate flexibility and economic liberalization to reach a long-run stability scenario that leads to greater international competitiveness and lower external vulnerability.     

Exchange Rules and the Incentive Compatibility of Choice Experiments

The incentive properties of stated-preference surveys continue to be a central debate in the valuation of public goods. The majority of empirical studies have focused on incentive properties of contingent valuation questions in relation to situations where answers have monetary consequences. This research explores the incentive properties of repeated, attribute-based choice questions when subjects are provided with an explicit connection between choices and outcomes. Two market/provision-rules are investigated: a posted-price market and a plurality-rule vote. These two provision rules are contrasted to treatments in which no provision rule is discussed—subjects are simply asked to choose their preferred alternative. These three hypothetical choice treatments are compared with a binding choice treatment. While none of the public good treatments are theoretically incentive compatible, we include a comparison of hypothetical and binding choices for a private-good that is incentive compatible. The private good experiments indicate that marginal willingness to pay (WTP) estimates from the hypothetical treatment are larger, but not statistically different than corresponding estimates in the binding choice treatment. Results for the public good experiments indicate that marginal WTP estimates from the hypothetical treatments are much larger, and statistically different than corresponding estimates in the binding choice treatment. The bias is largest when no provision rule is discussed. The bias is reduced with the inclusion of a provision rule, but surprisingly, there was no difference across provision rule treatments. Overall, our results indicate that choice experiments involving a public good should include a provision rule to reduce bias, but the resulting marginal WTP estimates may still be more biased, on average, than those arising from contingent valuation survey formats.     

Stepping-stones, dead-ends, or both? An analysis of Swedish replacement contracts

The paper studies whether temporary jobs in the form of fixed-term replacement contracts reduce the risk of future unemployment among job-seekers. Using matching on detailed information on labour market history and personal characteristics we find positive average effects of having a replacement contract. Our second focus is on whether the duration of the contract matters. We use data on replacement contracts with information on the ex ante duration of the contract which is determined by the individual on leave and find no significant effect on the subsequent unemployment risk of the replacement worker. However, the longer the replacement contract the higher is the probability of having an open ended contract at the same site 2–2.5 years after the start of the contract. Overall, the results suggest that replacement contracts may reduce the risk of future unemployment, but that longer contracts only improve the position within the workplace and not necessarily on the labour market in general.     

CEO Regulatory Foci,Environmental Dynamism,and Small Firm Performance

This research proposes and tests that regulatory foci of small business chief executive officers (promotion focus and prevention focus) relate to firm performance differentially when levels of environmental uncertainty vary. Results suggest that a promotion focus is positively related to firm performance, whereas a prevention focus is negatively related to firm performance. Further, these relationships are moderated by the degree of environmental dynamism such that in more dynamic environments, the relationship between promotion focus and firm performance is strengthened, whereas the relationship between prevention focus and firm performance is negatively affected. The reverse was found for less dynamic environments. Theoretical and practical implications as well as future research avenues are offered.     

Children as co‐researchers voicing their preferences in foods and eating: methodological reflections

There is an increasing and sustained interest in participatory research with children. We subscribe to these new perspectives by involving children as co‐researchers investigating their preferences when it comes to foods and eating. The overall aim of the research project Sustainable Eating Children's Way: Promoting Healthy Food Habits among Children 10–12 (Barn som medforskare i matlandskap) is to create an understanding of how children's food habits can develop in healthier and more sustainable ways. The specific aim of this paper was to discuss the methods used in the first phase of the project in order to find an answer to the question: ‘Is it possible to gain a deeper and more nuanced understanding of children's preferences in foods and eating?’ The research process in this project can be looked upon as two parallel processes: the overall one initiated by the senior research team and the one incorporating the children as co‐researchers. The children participating were 10‐year‐olds attending two classes in the fourth grade of a Swedish government‐funded school. We found the children knowledgeable and competent as co‐researchers. Involving children in the research processes and giving them freedom to explore is a promising way of letting their voices be heard in health promotion programmes.     

Unemployment insurance and the business cycle*

An equilibrium model is developed to study the interaction of the business cycle, unemployment insurance (UI), and the labor market for young men in Canada. The model combines optimal job offer, layoff, and recall decisions within a numerically solved and restricted Bayesian–Nash equilibrium. We consider the long‐run implications of changes made to unemployment insurance in Canada during the 1990s. The changes lead to equilibrium increases in average rates of unemployment, layoffs, and recalls. Eliminating UI lowers the equilibrium unemployment rate and average observed earnings. UI policy affects the timing of cycles of endogenous outcomes relative to the productivity cycle.     

Does the Gap in Family‐friendly Policies Drive the Family Gap?*

Segregation of the labour market into a family‐friendly and a non‐family‐friendly sector implies that women self‐select into sectors depending on institutional constraints, preferences for family‐friendly working conditions and expected wage differences. We take this sector dimension into account and find a severe penalty after birth‐related leave in the non‐family‐friendly sector, so that women who would be affected by this penalty self‐select into the family‐friendly sector. The penalty is a combination of a large human‐capital depreciation effect, a child penalty and no recovery.