Monetary policy, central bank objectives, and social welfare with strategic wage setting

The paper examines the implications of strategic wage-settingbehaviour by an inflation-averse monopoly union for the appropriatespecification of central bank objectives. Our principal findingsare as follows. First, the optimal setting of the parametersof the central bank's objective function differ in a significantway according to the relative timing of monetary policy andwage determination. Second, the ability of the central bankto precommit to a particular setting of monetary policy doesnot confer any welfare benefits. Third, we find little supportin this context for the notion that placing monetary policyin the hands of a conservative central bank will improve socialwelfare.     

Union objectives and indexation externalities in a monopolistically competitive economy

This paper extends the literature on indexation externalities by analyzing equilibrium and efficient indexation in a unionized economy characterized by a monopolistically competitive goods market. The assumption that union objectives relate to both employment and the real wage implies that union indexation decisions are associated with a negative externality and, as a consequence, the equilibrium degree of indexation is inefficiently high. This feature is characteristic of both passive and activist policy environments.     

Overt Employment Discrimination by Multinational Firms: Cultural and Economic Influences in a Developing Country

An issue that has been explored only to a limited extent is the role that multinational firms might play in promoting or inhibiting employment discrimination based on gender in developing countries. This study focuses on this issue within the context of Thailand, a country that, until quite recently, had one of the world's fastest growing economies, driven to a large extent through investment by foreign multinational firms. The approach we take is to analyze the determinants of the inclusion of explicit gender restrictions in job announcements by both multinationals and Thai-owned firms. Some job announcements restrict jobs to male or to female applicants, and some are silent on the issue of gender. Others specifically invite both male and female applicants. There are no laws in Thailand restricting gender-based discrimination nor requiring "equal opportunity" language on the part of private employers.
The analysis examines the relationship of the cultural characteristics of the firm's home country, along with economic growth in the host country, with the likelihood of various gender-based restrictions being placed in job announcements. We employ widely used measures of national culture developed by Hofstede.Empirical results demonstrate relationships between discrimination and certain of Hofstede's cultural dimensions. Economic growth was not found to have an impact on discrimination. Control variables in the study include dummy variables to control for occupation and the industry of the employee firm.     

Centralised Wage Setting, Inflation Contracts, and the Optimal Choice of Central Banker

The paper examines the appropriate design of central banking institutions in an economy in which the nominal wage is set by an inflation-averse monopoly union as a positive mark-up over its market-clearing value. The analysis considers both the optimal choice of central banker and the potential role for a linear inflation contract. The optimal set of arrangements is a central banker who attaches less significance to inflation than does society, combined with an inflation contract where the value of the contract parameter is related to the union's degree of inflation-aversion.     

Appraising boardroom performance

Rare is the company that does not periodically review the performance of its staff, business units, and suppliers. But rare, as well, is the company that does such a review of one of its most important contributors--its board of directors. Reviewing a board's performance is not an easy proposition: it has to be done by the members themselves, people who generally have many other responsibilities and whose time is always at a premium. But done properly, appraisals can help boards become more effective by clarifying individual and collective responsibilities. They can help improve the working relationship between a company's board and its senior management. They can help ensure a healthy balance of power between the board and the CEO. And, once in place, an appraisal process is difficult to dismantle, making it harder for a new CEO to dominate a board or avoid being held accountable for poor performance. Done properly is the key here, though. Done incorrectly, board appraisals can degenerate into self-serving evaluations or unpleasant, time-wasting exercises. Worse, they can evolve into rigid mechanical processes that discourage innovation. In fact, all of the approaches the authors observed in two years of research were incomplete. The authors have therefore drawn on the strengths of several different approaches to synthesize a best-practice process that is both rigorous and comprehensive.     

Changing Patterns of Industrial Relations in Taiwan

This article examines changing patterns of industrial relations (IR) in Taiwan. Although trade unions have become more autonomous since the lifting of martial law in the mid-1980s, trends such as the privatization of state-owned enterprises, industrial restructuring, flexible employment practices, and importation of foreign workers hinder union development. The millennium may represent a turning point for workers and their organizations because the Democratic Progressive Party (DPP) replaced the Kuomintang (KMT) as the ruling party. This may further union independence and power because the DPP tends to be a more pro-labor party. However, balancing the interests of workers and employers will still be a challenge for the DPP, particularly given employer opposition to many of the DPP's labor policies.