Expressive voting and two-dimensional political competition: an application to law and order policy by New Labour in the UK

There has been much debate regarding the electoral strategy adopted by New Labour in the lead-up to and then during their time in government. This paper addresses the issue from the perspective of left/right and liberal/authoritarian considerations by examining data on individual attitudes from the British Social Attitudes survey between 1986 and 2009. The analysis indicates that New Labour’s move towards the right on economic and public policy was the main driver towards attracting new centrist voters and could thus be labelled ‘broadly’ populist. The move towards a tougher stance on law and order was more ‘narrowly’ populist in that it was used more to minimise the reduction in support from Labour’s traditional base on the left than to attract new votes. The evidence presented provides support for an expressive theory of voting in that law and order policy was arguably used to counter alienation amongst traditional, left-wing Labour supporters.     

A proposal for a more objective measure of de facto constitutional constraints

In this paper we propose two new indicators of de facto constitutional constraints. The indicators are based on the presence or the absence of easily observable political events. This makes the proposed measures relatively objective and easy to verify relative to the most widely used indicators of de jure and de facto constitutions. This paper describes the indicators and demonstrates their usefulness for research on economic development.     

Choice Consistency and Preference Stability in Test-Retests of Discrete Choice Experiment and Open-Ended Willingness to Pay Elicitation Formats

This study tests the temporal stability of preferences, choices and willingness to pay (WTP) values using both discrete choice experiment (DCE) and open-ended (OE) WTP elicitation formats. The same sample is surveyed three times over the course of two years using each time the same choice sets. Choice consistency is positively correlated with choice certainty and choice complexity. The impact of choice complexity fades away in time, most likely as a result of learning and preference refinement. Although the OE WTP values remain stable over a time period of 2 years as in previous stated preference studies, DCE based WTP measures differ significantly, suggesting their use in benefits transfer may be limited.     

Do professional forecasters behave as if they believed in the New Keynesian Phillips Curve for the euro area?

This paper finds that participants in the European Central Bank’s Survey of Professional Forecasters have submitted forecasts that are consistent with a (mostly forward-looking) empirical version of the New Keynesian Phillips Curve for the euro area. The estimation technique takes advantage of the panel nature of the Survey of Professional Forecasters’ dataset to exploit both its time series and cross-section dimensions, and to control for unobservable individual heterogeneity across forecasters. The estimation results suggest that euro-area inflation forecasts have reacted less to unemployment forecasts after the start of the financial crisis but another cost measure (energy inflation) remains significant. This finding is consistent with a flatter Phillips Curve in the euro area after 2007. However, the reasons suggested by the International Monetary Fund for this finding, namely a better anchoring of inflation expectations and increases in structural unemployment do not seem to find support in the survey data. Instead, the expectations for compensation per employee submitted by professional forecasters are consistent with the existence of downward real-wage rigidities in euro-area labour markets.     

The relationship between population growth and standard-of-living growth over 1870–2013: evidence from a bootstrapped panel Granger causality test

This paper examines the linkages between population growth and standard-of-living growth in 21 countries over the period of 1870–2013. We apply the bootstrap panel causality test proposed by Kónya (Econ Model 23:978–992, 2006), which accounts for both dependency and heterogeneity across countries. We find one-way Granger causality running from population growth to standard-of-living growth for Finland, France, Portugal, and Sweden, one-way Granger causality running from standard-of-living growth to population growth for Canada, Germany, Japan, Norway and Switzerland, two-way causality for Austria and Italy, and no causal relationship for Belgium, Brazil, Denmark, Netherlands, New Zealand, Spain, Sri Lanka, the UK, the USA, and Uruguay. Dividing the sample into two subsamples due to a structural break yields different results over the two periods of 1871–1951 and 1952–2013. Our empirical results suggest important policy implications for these 21 countries as the directions of causality differ across countries and time period.     

Institutions and the route to reform of the European Union’s budget revenue, 1970–2017

Using process tracing, this paper charts the history of the changes in the EU’s revenue since 1970, including package deals and the unforeseen consequences of change, comparing the positions of the Council to those of the European Commission and European Parliament. Those revenue decisions allowed European integration to proceed though without a fully autonomous budget as Member States became more careful to calculate their net benefits or costs in relation to the budget. In December 2013, the European Union’s institutions established a High Level Group to recommend changes to the revenue base of the EU’s budget. This reported in January 2017, proposing to resolve the effect of sub-optimal revenue and budget decisions made by the European Union over many years, to reduce direct national contributions, to minimise the risk of unforeseen consequences, and to combine revenue flows with steering effects to discourage certain forms of economic behaviour in line with the wider policy agenda of the European Union.     

Bitcoin and entrepreneurship: breaking the network effect

This paper explores the question of whether the market process is capable of bringing about a spontaneous monetary switch to a new currency in the presence of strong network effects of the incumbent currency as well as the absence of contingencies such as extreme inflation or political instability. It does so by examining current happenings around Bitcoin. It finds that two mechanisms stand out: the coordinating efforts of the profit-maximizing entrepreneur as well as the ability to use the old and the new currency simultaneously. Specifically, it finds that marginal decisions made by rational agents merely seeking to maximize net private benefit irrespective of the network effect, be it entrepreneurs or users of the new currency, are capable of setting in motion a switch to a new currency. Whether or not these mechanisms play out fully in the case of Bitcoin still remains to be seen.     

Luigi Einaudi,the European Federation and the ECB’s Monetary Policy as Seen by Francesco Forte

Francesco Forte dedicated three books to the figure of Luigi Einaudi. The first was published in 1982, the second in 2009, and the third in 2016. Through these books he provides a comprehensive analysis of the liberal thought of Einaudi. This article focuses on Forte’s exploration and comments regarding Einaudi’s views and proposals for the European Federation (Einaudi 2011) and the European Central Bank’s unconventional monetary policy. Forte’s analysis of Einaudi has the merit of exalting one of the most prominent and lesser known features of his thought. Einaudi appears as the architect of what we call today the European Union. However no historian, economist, or politician has ever recognized the fundamental role of Einaudi. This lack of recognition should be extended to the Eurotower banker whose unconventional monetary policy has drawn so much from Einaudi’s theory of financial stability.     

Modeling Financial Integration,Intra-EMU and Asian-US External Imbalances

Intra-EMU external imbalances in the pre-crisis period up to 2008 are traditionally explained by EMU-oriented factors, e.g. euro-related financial integration. Chen et al. (2013) also emphasize external trade shocks, such as the competitive challenge of emerging Asia and oil exporters to EMU-periphery’s exports. Moreover, Asian-U.S. external imbalances are attributed to financial integration between East Asia and the USA in the aftermath of the East-Asian currency crises in the late 1990s (Angeletos and Panoussi 2011). Acknowledging these empirical facts this paper develops a Buiter (1981) three-country (EMU, Asia, US), two-region (EMU core, EMU periphery) OLG model to investigate the effects of both intra-EMU and Asian-U.S. financial integration on intra-EMU, Asian and U.S. external imbalances. We find that the widening of the intra-EMU external imbalances, in particular of trade imbalances, is related to the growth in Asian-U.S. imbalances and the dynamic inefficiency of the world economy, caused by excessive saving in Asia.