Medicare--where is its future?

Canadian health care policy is in a period of transition. Continuing reform is necessary to ensure quality; to evaluate health outcomes; and to promote efficiency, effectiveness and appropriateness of care.     

Taut plans, repressed inflation and the supply of effort in centrally planned economies

Conclusions In this paper we have developed a macroeconomic model of a centrally planned economy. In such an economy the use of taut plants to elicit greater supplies of effort from the work force is hampered by the inflationary pressures unleashed by the plan. Consequently the planners cannot, in general, optimize both the supply of effort and the supply of labour but rather must trade off one against the other.Planners may be able to alleviate inflationary pressures if they can impose wage discipline on enterprises or if they are willing to reduce investment. Both of these policies, however, have costs attached to them. Severe credit rationing designed to prevent upward wage drift may in fact reduce the output of enterprises by creating financial bottlenecks. Moreover, while upward wage drift does cause repressed inflation it may also be a way of moving workers from less efficient firms to more efficient ones and thus be useful in an allocational sense. Reductions in the volume of investment also represent a cost to planners since higher current output can be obtained only by sacrificing future output.We have also shown that the key mechanism driving our model, the link between disequilibrium in the market for consumer goods either at the micro-level or in the aggregate does exist. In our sample of East European countries there is a significant inverse relationship between deviations from the normal level of savings and deviations from the trend rate of growth of labour productivity, reflecting, we believe, fluctuations in the supply of effort by households.We are indebted to Zdenek Drabek, Michael Keren, Janos Kornai and J. Michael Montias for helpful comments. We also appreciate comments from the participants in the Ninth International Conference Models and Forecasts '85, Bratislava, Czechoslovakia, as well as from anonymous referees. Any errors and all opinions are, of course, entirely our responsibility.The research underlying this paper was supported by National Science Foundation Grant INT76-21084 and by funding from the National Council for Soviet and East European Research.     

Bidding for Labor

We present a competing-auction theory of the labor market, where job candidates auction their labor services to employers. An equilibrium matching function emerges which has many of the features commonly assumed, including constant returns to scale in large economies. The auction mechanism also generates equilibrium wage dispersion among homogeneous workers and constrained-efficient entry of vacancies in large economies. In a dynamic version of the model, we generate implied numerical values for equilibrium unemployment and wage dispersion. The theory makes the novel prediction that wage dispersion is a decreasing function of the discount factor and labor market tightness. Journal of Economic Literature Classification Numbers: E24, J31, J41, J64, D44.     

Electronic Monitoring to Promote National Security Impacts Workplace Privacy

This paper explores electronic workplace monitoring in light of the USA PATRIOT Act—federal legislation with a national security focus that expands the likelihood of electronic workplace monitoring to assist government investigators. The paper examines federal laws that cover the privacy rights of at-will employees in the context of electronic workplace monitoring, including recent cases that have narrowed employee privacy rights. The paper argues that business justifications for electronic workplace monitoring have been bolstered by national security concerns, resulting in decreased expectations of privacy in the workplace for at-will employees. There are persuasive arguments that employers should exercise restraint in the use of information obtained through electronic monitoring in discipline and discharge decisions related to at-will employees. These arguments in favor of exercising restraint flow from the text of the USA PATRIOT Act and consider the risk of discrimination lawsuits.     

Options for Electricity Transmission Regulation in Australia

The pricing of access to electricity transmission networks in Australia is currently under review. Several options have been proposed including those based on nodal pricing and the assignment of transmission rights contracts. As most of the marginal costs of transmission are recovered through wholesale electricity prices we focus on the key issue of regulation and investment incentives. We find that current options are unlikely to be adequate in terms of encouraging socially optimal levels and timing of new transmission investment. As an alternative, we propose a regulatory scheme, based on a related idea by Sappington and Sibley that can overcome this problem. Our scheme can potentially generate first best results and is readily applicable given the current institutional structure of electricity markets in Australia.