Unemployment insurance and union bargaining — an insider-outsider approach

A trade union is required to tax its own members to fund unemployment benefit paid to its unemployed members in an insider-outsider model of union bargaining over wages and employment. An increase in unemployment benefit imposed by the government increases employment overall but not necessarily the employment of insiders if the tax rate is exogenously fixed by the government.This paper has benefited from comments of Mick Common, Dipak Ghosh, Bob Hart, and Robin Ruffell. The comments of two anonymous referees and the advice of the Editor have greatly improved the presentation of the paper. Any remaining errors or omissions are the responsibility of the authors.     

Der Beitrag kontrolltheoretischer Methoden zur Analyse der Stabilisationspolitik

Ohne ZusammenfassungFür Anregungen und Unterstützung danke ich besonders den Herren Professoren Abele (Universität Freiburg/Schweiz), Tintner (TU Wien), Aoki (Universität Urbana/Illinois, USA) und Ferschl (Universität Wien); für allenfalls verbleibende Irrtümer bleibe ich selbst verantwortlich.     

Gold,liquidity and secured loans in a multistage economy Part I: Gold as money

This work relates to Department of the Navy Contract N00014-86-K0220 issued by the Office of Naval Research under Contract Authority NR 047-006. However, the content does not necessarily reflect the position or the policy of the Department of the Navy or the Government, and no official endorsement should be inferred. Revised with support of NSF contract SES-8812051.The United States Government has at least a royalty-free, non-exclusive and irrevocable license throughout the world for Government purposes to publish, translate, reproduce, deliver, perform, dispose of, and to authorize others so to do, all or any portion of this work.     

Karoushi: Stress-death and the meaning of work

The present article is concerned with some of the human factors involved when overtime and overwork become part of the regular and accepted pattern of work, with sometimes tragic results. While the economic miracle of Japan can be much admired, it has not been without human cost. Only recently, national and global attention is being focused on a new and deadly phenomenon in Japan:Karoushi, which the Japanese define as death from overwork, and which I choose to re-define as stress-death related to feelings of helplessness.It is my tentative hypothesis thatkaroushi is not directly caused by overwork, as popularly assumed. Rather, I believe that overwork is only one factor, and that stress-death is actually caused by the cumulative, long-range effects of working in a situation where one feels trapped and powerless to effect any change for the better, which in turn leads to attitudes of hopelessness — attitudes which are exacerbated, rather than ameliorated, by environmental and managerial factors.Dr. Walter Tubbs received his Ph.D. in Neuropsychology and Philosophy after doing work at Stanford and Drew Universities. After involvement in brain research at Stanford, he practiced stress-management counseling and biofeedback training at Loma Linda University, and taught for 13 years at the University of Redlands in California. He has been in Japan for 11 years as a Senior Researcher.     

Some unfamiliar dynamics of a familiar macro model a note

The idea that for small disturbances the full employment equilibrium is stable while for large disturbances it is unstable was coined by Leijonhufvud in the notion of a corridor. We discuss the existence of a corridor in the standard Keynesian-monetarist textbook macro-model. It turns out that though the full employment steady state of this model may be locally stable — which is the case when the well-known Cagan condition holds — the model is never globally stable. This is due to the inherent non-linearity in the demand for money function, arising from non-negativity of the nominal rate of interest. Thus, perhaps surprisingly, the Cagan condition is both necessary and sufficient for the existence of a corridor in the Keynesian-monetarist model.This note is adapted from a paper presented at the European Meeting of the Econometric Society, Bologna, August 1988. I would like to thank Søren Bo Nielsen and Peter Birch Sørensen (Copenhagen Business School), Thomas Lux (University of Bamberg), and two anonymous referees for helpful comments and suggestions. Remaining errors and shortcomings are mine.     

Two-moment decision models and rank-dependent utility

This paper extends results on the consistency of two-moment decision models with expected utility to rank-dependent utility preferences. The representations of expected utility and rank-dependent utility by --preferences have very similar comparative statics properties for linear distribution classes, except for the behavior with respect to small independent risks.I thank Soo Hong Chew for helpful discussion and three anonymous referees for valuable comments.     

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.     

Price leadership in a duopoly with capacity constraints and product differentiation

This paper analyzes Stackelberg price leadership in a duopoly in which firms are capacity constrained and products are imperfect substitutes. Assuming symmetric substitutes, linear demand, and efficient rationing, we characterize the equilibria with an exogenously specified leader. Using the equilibrium profits derived from these games, we argue that over certain ranges of asymmetric capacities an endogenous price leader will emerge. When endogenous leadership does arise, it is the large capacity firm which is the leader. We thus provide a game theoretic model of dominant firm price leadership.Dave Furth's research has been undertaken as a part of the project Competition and Cooperation. Dan Kovenock has benefited from financial support from Erasmus University Rotterdam, the Krannert School of Management, and the Jay N. Ross Young Faculty Research Fellowship. We are grateful to Tom Faith for valuable research assistance. We have benefited from the comments of the editor, two anonymous referees, and participants at the European meetings of the Econometric Society in September 1989 and the North American Winter Meetings of the Econometric Society in December 1989.     

Versicherungsvertragliche Anzeigepflicht und Garantiehaftung für culpa in contrahendo

To sanction the insurant’s obligation to disclose the risk-relevant circumstances by the insurer’s exemption from performance does not comply with the ordinary pattern of pre-contractual liability. Instead of making the insurant responsible for the consequences of his breach of duty, the German Insurance Act subjects him to a guarantee which is comparable to the one imposed by the German Civil Code in the case of initial impossibility. The insurant has to guarantee that the facts which he did not, or at least not entirely, disclose do not cause any obligation of the insurer. The structure of this sanction is equivalent to the insurer’s so-called liability of performance. But contrary to the latter it can be justified by the specific importance of the insurant’s pre-contractual obligation of disclosure.