Unionism and the public sector

It is incorrect and misleading to speak of unionization as a ‘human right’. The only human right is ‘self-ownership’, i.e. to pursue goals with one's own abilities but with no force or fraud against others. Government cannot dispense rights, only privileges and protections to some at the expense of others. A minimal degree of coercion exercised by government is unavoidable. But labor unions are not governments. Government has granted significant privileges to unions in the private sector, but such are not appropriate for public sector unions.     

Institutionalism versus Orthodoxy

A bstract . Orthodox economics has been quite effective in exploiting equilibrium methodology; equilibrium as a heuristic device, as a theoretical norm, and as a prototype of the scientific method. Also, orthodoxy has contrived the dichotomy of equilibrium-anti-equilibrium to depict institutional thought as being muddled and unscientific. Institutionalists have not successfully countered these attacks, nor have they adequately articulated a comprehensive methodological alternative to orthodoxy. Institutionalists have paid too much attention to the methodological components of institutionalism and have neglected the articulation of a guiding, overall methodology. It is proposed that institutionalists recast the methodological debate by expanding the arena from equilibrium-anti-equilibrium analysis to the broader context of closed versus open systems analysis. This would both help expose the methodological weaknesses of orthodox economics, and demonstrate the relevance and power of institutionalism for socioeconomic investigation.     

Sector-specific capital, “Bang-bang” investment,and the Filippov solution

Bang-bang investment in a two-sector growth model with immobile capital is rational and leads to a unique and globally stable long-run equilibrium along a sliding trajectory. This steady state coincides with the stationary equilibrium in the traditional model with non-sector-specific capital.This article was written while the authors were visiting scholars at Cornell University. We gratefully acknowledge financial assistance from the Erasmus University Trust Fund and the Netherlands Scientific Organization. We would like to thank, without implicating, two anonymous referees, Martijn Herrmann, Jean-Marie Viaene, Claus Weddepohl, and the participants of seminars at the University of Maryland, the University of Montreal, and Erasmus University Rotterdam for perceptive remarks and useful comments. Jeroen Hinloopen and Rien Wagenvoort provided able graphical assistance. The views expressed in this article are those of the authors and not necessarily those of the World Bank.     

ASSET BACKED COMMERCIAL PAPER: GET WITH THE PROGRAM

Asset backed commercial paper, or ABCP for short, is commercial paper that is issued by a special purpose corporation against undivided interests in corporate receivables, including retail, trade, or export receivables. Since the inception of the market in 1983, the volume of ABCP has grown to represent about 16% of the total commercial paper market.
ABCP is a valuable source of liquidity for companies that generate a steady flow of quality receivables. Many ABCP programs restrict purchases to companies with investment grade ratings. For such companies, ABCP may help diversify funding sources and allow the firms to lower their funding costs by arbitraging different markets. But ABCP programs can also prove a low-cost source of funding for companies that either do not have access to the CP market through their own balance sheets or have used up their prime CP and bank borrowing capacity. ABCP is also an important source of funds for smaller companies requiring liquidity to support rapid growth.
ABCP programs can be viewed as "synthetic" revolving bank credit facilities in the sense that they can provide the same flow of funds as revolving credits by using a vehicle constructed specifically to refinance pools of receivables. The benefits of ABCP relative to bank lines of credit may take the form of either lower interest rates, less restrictive financial covenants, or both. Although ABCP is at best a partial substitute for bank credit, the liquidity provided by an asset backed commercial paper program can be used to hold down the costs of bank borrowing.     

Calibrating an algorithm for estimating transactions from FXFX exchange rate quotes

In this paper we investigate the efficiency of a class of transaction-generating algorithms, originally suggested in Bollerslev and Domowitz (1993). Our comparison utilizes real transaction data recorded over Reuters D2000-2 electronic broking system for 7 h in June 1993 and transaction data generated from FXFX quotations over an identical period. Results suggest that, at this high-frequency data sampling, the performance of these transaction-generating algorithms is poor, with the most likely explanation of this outcome due to the high-frequency characteristics of FXFX spreads and quotation intensity.