Testing the presence and the absence of purchasing power parity: results for fixed and flexible regimes

Recent empirical studies concerning purchasing power parity (PPP), using the concept of cointegraton, have tested the null hypothesis of the absence orthe presence of PPP. The disadvantage of using either of these approaches is that the conclusion is ambiguous when not rejecting the null: the result could be due to either the null hypothesis being true or by the low power of the test and lack of information in the data. Therefore, there is substantial information to be gained by applying both approaches within the same study. This study uses the ordinary DF test with PPP as the alternative hypothesis and a recently suggested test by Kwiatkowski et al. (1992) with PPP as the null. The tests are applied to four major industrial countries real exchange rates, each split into four different samples, including fixed as well as flexible exchange rate regimes. The absence of PPP cannot be rejected while the presence can be rejected.     

Perceptions and attitudes following a terrorist shock: Evidence from the UK

Transnational terrorism in Western countries has raised questions about security measures that constrain civil liberties. This is the first paper that uses a terrorist attack, that in the London 7/7/2005, as an exogenous source of variation to study the dynamics of risk perception and the effect on the readiness to trade off civil liberties for enhanced security. In this framework we show that willingness to trade off security for liberties is dramatically affected by changes in individual risk assessments due to a terrorist attack. We document the extent of persistence of changed attitudes.     

Analysing the Institutional Logic of Late DRG Adopters

Abstract: This study investigates how institutional logics that are prevalent in an organizational field influence change in management accounting. More precisely, we examine the institutional logics of late DRG adopters through which organizations attempt to address the pressures imposed by the institutional field of health care. Specific attention is also paid to the way in which organizations operate at different institutional levels and what kinds of interrelationships exist between these levels. Such developments may at least partially explain why the implementation and adoption of DRG–based accounting systems in Finnish health care took almost twenty years.     

Do Immigrants Affect Firm‐Specific Wages?*

We propose and test a novel effect of immigration on wages. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, immigrants might also affect wage formation at the most disaggregate level – the workplace. Using linked employer?employee data, we find that an increased use of low‐skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables.     

Jost Krippendorf

The paper examines the extent to which tourism in the Great Barrier Reef and Wet Tropics World Heritage Areas can be said to be sustainable. To do this it provides a definition of sustainable tourism for protected areas, in terms of ecological economics criteria. Tourism, and its management, in the two World Heritage Areas is described, and the outcomes are assessed against the definition of sustainable tourism. The available data is not sufficient to permit a definitive overall assessment. However, a favourable interim verdict appears justified against environmental criteria in the case of the Great Barrier Reef. There is in both cases a dearth of suitable data for proper assessment against economic criteria. The criteria proposed and the assessment exercise reported provide a contribution to developing ways to evaluate sustainable tourism.