SIX WAYS TO LEAVE UNEMPLOYMENT

This paper uses a unique Portuguese dataset to examine the effect of access to unemployment benefits (UBs) and their maximum potential duration on escape rates from unemployment. In examining the time profile of transitions out of unemployment, the principal contributions of the paper are twofold. First, it provides a detailed state space of potential outcomes: open-ended employment, fixed-term contracts, part-time work, government-provided jobs, self employment, and labour force withdrawal. Second, it is able to exploit major exogenous discontinuities in the maximum duration of unemployment benefits to identify disincentive effects. While confirming strong disincentive effects, it is shown that use of an aggregate hazard function regression model compounds very different and even contradictory effects of the determinants of unemployment.     

Multivariate partial adjustment of financial ratios: a Bayesian hierarchical approach

In this paper we propose a multivariate extension of the partial adjustment model of financial ratios. To that end, we use a dynamic factor model which assumes that financial ratios measuring, essentially, the same economic–financial dimension of the firm evolve in a similar way, reflecting the evolution of the common factor. The proposed model is hierarchical with three levels. The first describes the relationship between each ratio and its common factor; the second describes the evolution of the common factors over time by means of Lev's ( 1969 ) partial adjustment model; and the third analyzes the similarity of firms' adjustment coefficients, taking into account their characteristics. The methodology is applied to the analysis of a set of financial ratios related to the business and financial structure of the firm. Copyright © 2008 John Wiley & Sons, Ltd.     

Energiesparen: Warum wird Beratung gefördert?

Home renovation is generally asserted to be a highly effective means to increase residential energy efficiency and thereby contribute to climate protection from reduced energy consumption. As part of a larger package of measures in the residential sector, the German government is consequently providing financial support for home audits from recognized energy experts who provide advice on retrofitting options. To date, the question concerning the effectiveness these home audits has largely escaped empirical scrutiny. The present paper fills this void by providing evidence for considerable free-rider effects within the home audit program, yielding serious reservations with respect to both the effectiveness of the program and its fiscal costs. Moreover, given the substantial differences between the gross- and net effects of home audits that are revealed by this analysis, the program’s contribution to climate protection and thereby the central justification for the associated government outlays is called into question. The social benefit of the program emerges only from those retrofits that would not have been undertaken in the absence of the home audit.     

Impacts of technology readiness on emotions and cognition in Brazil

This study proposes and tests an extended model for consumer adoption of high technology products in a Latin American country (Brazil) by integrating concepts present in the consumer behavior literature: the Consumer Acceptance of Technology model (Kulviwat et al., 2007) and the technology readiness construct (Parasuraman, 2000). The proposed model considers the relationships between cognitive and affective constructs with technology readiness. By means of structural equation modeling conducted on a sample of 435 young consumers, the results indicate significant relationships between the constructs assessed, showing that consumers' cognitive and affective evaluations of new technologies are significantly influenced by their technology readiness. The effects of technology readiness over affective assessments were greater than those relative to cognitive evaluations regarding high-tech innovations. Nonetheless, the results may reflect specific characteristics of Brazilian (and other Latin American) consumers, who are usually more emotive than those of more rational cultures.     

A parsimonious model to forecast financial distress,based on audit evidence

This paper provides evidence that audit reports convey relevant evidence for inferring the existence of underlying, unrevealed, financial imbalances. Unlike previous works, which studied US listed-firms bankruptcy, our research deals with Spanish non-financial SMEs under financial stress. Our results indicate that the audit of distressed SMEs has several distinctive features: higher auditor rotation, more qualified reports, and non-compliance with deadlines to approve and file the annual financial statements. We use this evidence to build and test a parsimonious and reliable forecast model. Several implications for auditors’ independence, information quality, and failure forecast are discussed.     

The effect of social security,health, demography and technology on retirement

This article studies the determinants of the labor force participation of the elderly and investigates the factors that may account for the increase in retirement in the second half of the last century. We develop a lifecycle general equilibrium model with endogenous retirement that embeds Social Security legislation and Medicare. Individuals are ex ante heterogeneous with respect to their preferences for leisure and face uncertainty about labor productivity, health status and out-of-pocket medical expenses. The model is calibrated to the U.S. economy in 2000 and is able to reproduce very closely the retirement behavior of the American population. It reproduces the peaks in the distribution of Social Security applications at ages 62 and 65 and the observed facts that low earners and unhealthy individuals retire earlier. It also matches very closely the increase in retirement from 1950 to 2000. Changes in Social Security policy – which became much more generous – and the introduction of Medicare account for most of the expansion of retirement. In contrast, the isolated impact of the increase in longevity was a delaying of retirement.     

Evolving China Strategies: How the Japanese Compare

Taking a sceptical view of the ‘Asian miracles’ proposition that government failure is the main culprit behind development failure, this article reviews the Philippine development experience. The Philippine configuration consists of a weak state carrying out industrial promotion and a large private sector whose dynamics depend heavily on state-managed privileges. In the final section, the article proposes an alternative to the rent-seeking model, in which rents defined as returns contingent on political position and rivalry over political position determine private investment behaviour. In such a society, there is limited internal basis for structural change and growth is accidental to external developments.     

GENERAL AND PARTIAL EQUILIBRIA IN A CONSUMPTION ECONOMY

We consider a simple aggregative consumption economy, where there is a market for commodities and four financial markets: for bonds, deposits, credits and some speculative asset. There is a Wicksellian central bank. The existence of temporary equilibrium is discussed by considering partial equilibria in the different markets.