Recent evidence on the impact of government budget deficits on the ex ante real interest rate yield on Moody’s Baa-rated corporate bonds

This study provides recent empirical evidence on the impact of the federal budget deficit on the ex ante real interest rate yield on Moody’s Baa-rated corporate bonds. The study is couched within an open loanable funds model that includes the ex ante real short term real interest rate, the M1 money supply, net international capital inflows, and the unemployment rate. Using quarterly data for the period 1973.1–2007.4, two-stage least squares estimation reveals that the federal budget deficit, expressed as a percent of GDP, exercised a positive and statistically significant impact on the ex ante real interest rate yield on these corporate issues.     

The State of Public Sector Unionism: Challenges and Opportunities

The face of unionism in the United States is becoming increasingly public sector. On the surface, public sector unionism appears as a bright spot for labor. A more careful examination of the data, however, reveals that such unionism is at a standstill. Absolute growth has been insufficient to offset losses in private industry, and it is largely tied to increases in public employment. Public employee unions face numerous serious challenges, and questions have been raised in the federal service about the very legitimacy of union representation. Future scenarios suggest that public sector unionism as a whole will likely remain in a more or less stagnant position.     

Fundamental impossibility theorems on voluntary participation in the provision of non-excludable public goods

Groves and Ledyard (Econometrica 45:783–809, 1977) constructed a mechanism attaining Pareto efficient allocations in the presence of public goods. After this path-breaking paper, many mechanisms have been proposed to attain desirable allocations with public goods. Thus, economists have thought that the free-rider problem is solved, in theory. Our view to this problem is not so optimistic. Rather, we propose fundamental impossibility theorems with public goods. In the previous mechanism design, it was implicitly assumed that every agent must participate in the mechanism that the designer provides. This approach neglects one of the basic features of public goods: non-excludability. We explicitly incorporate non-excludability and then show that it is impossible to construct a mechanism in which every agent has an incentive to participate.     

Fostering entrepreneurship in distressed urban neighbourhoods

During the last decade entrepreneurship research has focused increasingly on spatial aspects of entrepreneurship. Many systematic studies have been conducted on the national or regional scale, although other geographical scales—cities and their single districts and neighbourhoods—have drawn less attention. In this context, the paper aims, firstly, at identifying spatial success factors of entrepreneurial activities and their promotion at the local scale. Secondly, the paper aims at contributing to the development of a conceptual frame at the interface of entrepreneurship research, urban and economic geography, and regional economics. Empirically, the paper draws on results from explorative case studies in two distressed urban areas.