Reassessing the role of buffer stock money under oil price shocks

This paper uses the structural vector autoregressive approach to assess the significance of buffer stock money under alternative real shocks in the U.S. economy over the 1960–96 period. Buffer stock effects are shown to play a minor role when oil price shocks are explicitly considered.     

Green consumption or sustainable lifestyles? Identifying the sustainable consumer

This paper examines green consumption in the context of an increasing focus on sustainable lifestyles. The authors argue that green buying must be seen in the context of wider debates surrounding the development of sustainable ways of living that incorporate other environmental actions in an holistic conceptualisation of sustainable lifestyles. This framework is operationalised in a study of environmental action in and around the home, in which 1600 households in Devon were asked questions concerning their everyday environmental actions. These results were manipulated so as to investigate how the different behaviours related to each other and also whether different groups of individuals could be identified, conforming to different lifestyles. The results suggest that conventional forms of green consumption can indeed be related to other forms of environmental action and that at least four different types of environmentalist can be identified. The implications of these results for policy makers are discussed at the end of the paper.     

Do Newly Listed Derivatives Affect the Market Risk Premium in a Thin Stock Market?

This study examines the effects on the stock market unitary risk premium and volatility associated with the listing of stock and stock index derivatives in Switzerland. Based on a univariate GARCH (1,1) specification of the stock index variance and a time-varying unitary risk premium representation, we can reject the hypothesis that stock and stock index derivatives listings do not affect the total risk premium. Contrarily to previous empirical evidence, we find that derivatives listings affect both the conditional market returns' variance and the unitary risk premium through structural shocks. The gradual market completion hypothesis is further corroborated in that, cumulatively, the three stock and stock index options futures derivatives listings reduced the unitary risk premium while the marginal impact of each successive listing decayed.     

Unobserved components in an error-correction model of consumption for Southern European countries

In this paper we show how the potential misspecification of the consumption function can be ameliorated by approximating any unmodelled long run variation with an unobserved component in the form of a time-varying trend. This methodology is applied to Greek, Portuguese and Spanish consumption functions during the post-second World war period. The empirical evidence suggests that there are many determinants of long-run consumption in these countries, in addition to income and inflation, and these unobserved long-run effects are captured by a nonstationary stochastic component. The long-run elasticity of consumption with regards to the unobserved component is greater than unity in all countries. First version received: January 1999/Final version received: June 2000     

Convergence to symmetry in dynamic strategic models of R&D: The undiscounted case

Will R&D increase or decrease the asymmetry between firms over time? We examine this issue in the context of a dynamic, alternate-move duopoly model of non-cooperative R&D. The asymmetry we consider is with respect to the initial stocks of technological knowledge which provides one firm a greater potential for current and future profits in the product market. Utilizing a value loss process constructed from the Optimality Equation of dynamic programming, we show that for the undiscounted case the asymmetry between the firms disappears over time. We obtain this convergence-to-symmetry result by imparting a temporal character to R&D through the notion that R&D investment cannot be changed instantaneously, by allowing research externalities, complementarity or substitutability between own and appropriated R&D, and either increasing, decreasing or constant returns to scale in the production of technical knowledge from own and rival R&D.     

Potential Discrimination in Structured Employment Interviews

This experimental study examines the effects of bias toward persons with disabilities (PWDs) upon the employment interview decision process. The design and operationalization of the study permitted examination of the effects of specific disabilities, interview performance, and the resulting interaction between disability and interview performance, using 630 undergraduate students at a major university in the southwestern United States as subjects. The results indicate that (1) interview performance has a favorable, significant main effect upon subsequent HRM decisions, (2) specific disabilities, that is, child care demands, HIV-positive status, and being wheelchair-bound, have unfavorable, significant main effects upon subsequent HRM decisions, and (3) the presence of any of the disabilities decreased the favorable impact of superior interview performance. The limitations of the structured interview to mitigate bias were demonstrated. Given the pervasive, unfavorable treatment directed toward PWDs, it appears that the enactment of the Americans with Disabilities Act of 1990 (1993) is warranted. The public policy implications of these results and recommendations for future research were discussed.     

Impact of Contract Farming on Income: Linking Small Farmers, Packers, and Supermarkets in China

This study compares contract and non-contract growers of apples and green onions in Shandong Province, China in order to explore the constraints on participation and the impact of contract farming on income. We find little evidence that firms prefer to work with larger farms, though all farms in the area are quite small. Using a Heckman selection–correction model, we find that contract farming raises income even after controlling for observable and unobservable household characteristics. These results suggest that contract farming can help raise small-farm income, though questions remain regarding the number of farmers that can be brought into such schemes.     

The Economics of Pensions

This paper sets out the economic analytics of pensions. Afterintroductory discussion, successive sections consider the effectsof different pension arrangements on labour markets, on nationalsavings and growth, and on the distribution of burdens and benefits.These areas are controversial and politically highly salient.While we are open about expressing our own views, the main purposeof the paper is to set out the analytical process by which wereach them, to enable readers to form their own conclusions. Footnotes ¹ E-mail addresses: n.barr{at}lse.ac.uk; pdiamond{at}mit.edu