A Personal Agenda for the Next Decade

The paper sets a broad agenda touching several areas of policy. It starts from the least likely policy at this point of time, the use of the tax system for redistribution. It discusses prudent macroeconomic coordination without the strings of the Maastricht Treaty in business troughs. Regulation of financial markets, agricultural policies, and health issues are coming up on a desirable agenda of the United States, but are probably important for all countries, as are social security policy and climate change.     

Uncertainty Associated with Future Environmental Costs and the Market's Differential Response to Earnings Information

This study examines whether the uncertainty arising from a firm's exposure to future environmental costs (environmental uncertainty) affects the market's price sensitivity to reported earnings. Specifically, when environmental uncertainty is significantly high, are investors more responsive to reported earnings released by 'high-polluting' firms than reported earnings announced by 'low-polluting' firms within the same industry? The initial impact of Title IV (the acid rain provisions) of the 1990 Clean Air Act Amendments (1990 CAAA) on the US electric utility industry provides the research setting required to isolate the effects of environmental uncertainty while addressing this question. Consistent with theoretical predictions, we find that the earnings response coefficients (ERCs) of high-polluting electric utilities are significantly greater than those of their low-polluting counterparts during a predicted period of elevated environmental uncertainty. In adjoining sample years associated with lower environmental uncertainty, we observe no statistical difference in the magnitude of the ERCs between these two groups. In addition, the study's findings suggest that the magnitude of the ERC is increasing in the firm's exposure to future environmental costs, after controlling for other factors that potentially affect ERCs.     

Internal labour markets in the Australian banking industry: their nature prior to the Second World War and their recent decline

This paper uses evidence from late nineteenth-and early twentieth-century personnel records of two Australian banks to examine the nature of internal labour markets prior to the Second World War. It is argued that the industry possessed all the classic features of internal labour markets: limited ports of entry, internal promotion, long careers, and assignment of wages by well-defined rules. The paper then examines the reasons why banks adopted internal labour markets. Finally, the paper examines the recent decline of internal labour markets and examines the role of technological and social changes in this decline.     

Lord Aldington's Disservice to Wealth Creation

The habitual opposition to the growth of service industries from traditionalists and manufacturing interests is rehearsed in the Aldington Report on Overseas Trade John McEnery (right), former Under-Secretary at the Department of Trade and Industry, and author of IEA Research Monograph Manufacturing Two Nations, condemns outmoded patterns of thought and recalls on the Upper House to abandon its manufacturing myopia     

Foreign Factor Ownership and Optimal Tariffs

In the presence of foreign factor ownership tariffs change not only the terms of (goods) trade but also income flows between countries. Assume that only the home country owns factors abroad. Then the optimal tariff is negative if and only if foreign factor ownership entails trade-pattern reversals. Trade-pattern reversals are neither a necessary nor a sufficient condition for a negative optimal tariff if the foreign country owns factors in the home country. Changes in the home country's tariff shift the foreign country's offer curve. This adds a new dimension to optimal tariff analysis.     

From Phillips curve to wage curve

Summary In most traditional macroeconomic models for The Netherlands the wage equation is specified by a Phillips curve, in which wage growth is negatively related to the unemployment rate. This paper shows, however, that wage formation can better be described by the so-called wage curve, in which the wage level, instead of wage growth, depends negatively on the unemployment rate.The author thanks S.K. Kuipers and D.A.G. Draper and other colleagues of the Central Planning Bureau for their useful comments.     

Regulatory Control of the Track Access Charges of Railtrack plc

Railtrack plc, floated in 1996, was the private sector owner of Britain's railway track, signals and stations. Its major source of revenue came from track access charges, which individual train operating companies (TOCs) paid for use of the infrastructure. Since many of these TOCs received substantial subsidies to assist in paying their track access charges, Railtrack was in effect being heavily subsidised. In October 2001, the Government decided that these arrangements were no longer viable and placed Railtrack into administration. This article explains how the level of indirect subsidies to Railtrack had become excessive, and raises crucial questions that need to be addressed in settling the future shape of the railway industry.     

PROCYCLICAL RETAIL LABOUR PRODUCTIVITY*

The influence of lagged adjustment and consumer spending on retail labour productivity is investigated. Both influences result in a procyclical productivity pattern.