Long-run Positions and Short-run Dynamics in a Classical Growth Model

The aim of this paper is to study the qualitative impact of short-run disequilibria on long-run positions. In this perspective, we refer to a classical framework. We underline that one-sector classical growth models only deal with perfectly adjusted situations (steady-state equilibria). Such models assume that short-run dynamics are neutral in the long run which means that the steady state is defined independently of the transient dynamics. In order to show that this situation is not always realized, we propose a modified version of Kurz's growth model (“Technical change, growth and distribution: a steady-state approach to ‘unsteady’ growth”, in Kurz H. D.: Capital Distribution and Effective Demand, Blackwell, Oxford, 1990, pp. 210–239) that integrates short-run disequilibria. We obtain dynamics that exhibit a multiplicity of equilibria. Therefore, short-run events can no longer be neglected, since they contribute to the emergence of the long-run equilibrium.     

ON SURRENDER AND DEFAULT RISKS

This paper examines certain types of saving institutions or insurance companies that are subject to surrender and default risks, in a stochastic interest rate context. In the setting under study, investors are endowed with an option to surrender. The goal of the paper is to study how this option impacts the default risk of the issuing company and the value of the contracts it issues. Surrender risk has been extensively studied in arbitrated markets, using trees or least‐squares Monte Carlo methods for valuations, although practitioners often rely on econometric methods. We deal with surrender risk in a third way, assuming policyholders have sets of information and preferences that differ from those of financial market agents, but without relying on econometric methods. In particular, policyholders are supposed to be only partially rational (at least in the financial sense). This is done by modeling surrender risk through a Cox process correlated to the assets and interest rate dynamics. The paper provides formulas for the dynamics of the assets of the issuing firm (these dynamics drive the default time of the company), and for the valuation of liabilities and equity. A numerical illustration is provided.     

Employment and Skills in Financial Services: A Comparison Of Banks and Insurance Companies in Five OECD Countries

Throughout the 1960s and 1970s, financial services remained among the fastest growing sectors in most OECD countries. Since the early 1980s however, the pace of employment growth in financial services has slowed in several countries. In a few of them, such as France, there even have been warnings by industry executives of subsranrial employment losses in the years ahead as result of both market saturation and large productivity increases due to the widespread diffusion of computerised technologies [Le Monde, 1986]. A study recently completed by the authors for the OECD's Centre for Educational Research and Innovation (19871 arrives a conclusions that are at once more optimistic and more complex.     

Domestic multinationals, foreign affiliates, and labour demand elasticities

Using information on a panel of multinational firms operating in the United Kingdom from 1996 to 2005, we find that labour demand in domestic multinationals is less sensitive to labour cost changes than in foreign multinationals. This difference in the wage elasticity of labour demand persists even when we control for the skill intensity of firms or their level of intangible assets. This is in line with an interpretation that the provision of headquarter services in domestic multinational firms protects against strong fluctuations in labour demand. Overall, our results suggest that the wage elasticity of labour demand is about 40 % lower in domestic than in foreign multinationals.     

Evolution of the market economy : The responsibility and contribution of business

The scale and seriousness of contemporary social problems require a new form of cooperation among governments, companies and non-governmental organizations (NGOs). The Business Association for the World Social Summit (BUSCO) has undertaken a consultation exercise among heads of companies in various sectors (industry and services) and of different sizes in 30 countries. The business leaders who have been consulted are prepared to assume their civic responsibilities, and go beyond their traditional responsibilities towards their clients, employees, shareholders, suppliers and subcontractors. They accept the need to contribute to an unprecedented amplification of social progress, and to involve themselves in an action programme.     

中国经济的内外平衡:一种三管齐下的战略

本报告是我和Giavazi教授共同完成的.显而易见的:第一,现有的宏观经济战略在中国是极其成功的;第二,我们也看到中国经济和社会的不平衡在不断地加剧,因而要进行一些调整.这是两个前提和出发点.我们报告的焦点是宏观经济战略和策略.而且,我们思考的结果和各项建议与"十一五"规划都非常相似,可谓是"英雄所见略同".     

International bank-industry relations: An empirical assessment

This paper examines the determinants of the provision of banking services in host countries of multinational companies, based on an empirical study of these relationships in the case of France. Factors evaluated include: the traditional banking relationships in the multinational's home country, the strengths and weaknesses of indigenous and foreign banks in the host environment, the specific nature of the banking service required, and the nature of bank reputation in the host country.     

Robust Imitation Strategies

Performance is the lifeblood of a firm's management. Performance itself depends on the adaptation of strategy based on learning and the environment. An important way that firms adapt their strategy is through imitation or mimetic isomorphism. Imitation implies a referent for such adaptations. This article seeks to determine who or what should serve as that referent. Accordingly, this research (1) develops a broad and rich model of industry dynamics, bringing together literature from industrial economics, strategic groups, learning, and resource‐based theories; (2) examines the robustness of imitations strategies; and (3) develops a framework of the managerial implications of imitative behavior in varying industry conditions. Copyright © 2013 John Wiley & Sons, Ltd.     

Product-based cultural change: Is the village global?

We provide a model of product-based cultural change where trade integration leads to cultural convergence. A standard trade model of Dixit–Stiglitz monopolistic competition is coupled with a micro-founded model of cultural dynamics. We show that access to varieties that are attached to a global cultural type changes the incentives of parents to socialize their children and transmit their type. The resulting increase in agents of the global cultural type leads to a magnification of the initial shock. A striking feature of the model is that even temporary shocks to openness may have permanent effects through the changing distribution of preferences in the economy.