Victory margins and the paradox of voting

This paper addresses a simple question: why do people vote? Though simple, this question remains unanswered despite the considerable attention it has received. In this paper, I show that purely rational–instrumental factors explain a large fraction of turnout variations, provided that the effect of the margin of victory on implemented policy is considered. I extend Myerson's models of elections based on Poisson games, and show that, when platforms are responsive to vote shares, the predictions of the model become consistent with several stylized facts, including the secular fall in turnout rates in the US.     

Public finance and the optimal speed of transition*

We develop a general equilibrium model that jointly considers the influence of capital accumulation constraints and of labour market frictions on the process of transition. We endogenize the economic and budgetary costs of different government policies and show that, early in transition, governments ought to subsidize state firms. Provided that intertemporal commitment is feasible, this policy limits the initial output fall, which relaxes capital accumulation constraints, accelerates transition, and increases welfare. Moreover, by resorting to indirect – instead of direct – taxes, governments can bring the path of transition closer to the first best. Yet, political pressures may induce a policy of suboptimal subsidization.     

Does employment protection help immigrants? Evidence from European labor markets

High levels of employment protection reduce hiring and firing and have a theoretically ambiguous effect on the employment level. Immigrants, being new to the labor market, may be less aware of employment protection regulations and less likely to claim their rights, which may create a gap between the costs for employers of hiring a native relative to hiring an immigrant. This paper tests that hypothesis drawing on evidence for the EU and on two natural experiments for Spain and Italy. The results suggest that strict employment protection legislation (EPL) gives immigrants a comparative advantage relative to natives. Stricter EPL is found to reduce employment and reduce hiring and firing rates for natives. By contrast, stricter EPL has a much smaller effect on immigrants.     

Shifts in Portfolio Preferences of International Investors: An Application to Sovereign Wealth Funds

We develop a dynamic general equilibrium model to analyze the macroeconomic effects of a shift in portfolio preferences of foreign investors. The model has two countries and two asset classes (equities and bonds). It is characterized by imperfect substitutability between assets and allows for endogenous adjustment in interest rates and asset prices. To illustrate the mechanics of the model, we calibrate it to analyze a transfer of reserves from central banks to sovereign wealth funds (SWFs). We look separately at two diversification paths: a shift away from dollar assets (path 1), and a shift away from US bonds to US equities (path 2). In path 1, the dollar depreciates and US net debt falls on impact and increases in the long run. In path 2, the dollar depreciates and US net debt increases in the long run.     

Authentic leadership promoting employees' psychological capital and creativity

Two hundred and one employees report their psychological capital, as well as their supervisors' authentic leadership. Supervisors describe the employees' creativity. The main findings show that authentic leadership predicts employees' creativity, both directly and through the mediating role of employees' psychological capital. The study empirically validates theoretical arguments that suggest integrating authentic leadership and psychological capital in research, and indicates that both may foster employees' creativity, a crucial resource for helping organizations to face competitive challenges, take advantage of business opportunities, and improve organizational effectiveness.     

Convergence among EU regions, 1990–2001

This article focuses on convergence in terms of output per working age person across regions in the European Union for the period 1990–2001. Controlling for the quality of national institutions, the authors investigate whether the status of “objective 1” region improves the speed of convergence as compared to what would be expected given the regions' initial conditions. They find evidence of conditional convergence among EU regions, with the quality of national institutions having a positive impact, but no evidence of a correlation between eligibility for objective 1 and faster convergence.     

The role of intrinsic in-flight cues in relationship quality and behavioural intentions: segmentation in less mindful and mindful passengers

The current study quantifies the relationship between intrinsic in-flight cues, passenger satisfaction, affective commitment, trust, and behavioural intentions in passengers travelling in low-cost carriers and legacy airlines. As far as we know, this is the first attempt to employ a multi-group analysis to test (1) if passengers in low-cost carriers and legacy airlines, and also (2) if the group of mindful passengers and the group of less mindful ones, have significantly different perceptions about flights in Europe. A total of 304 cases of legacy airlines and low-cost carriers were used in data analysis. Overall, affective commitment and trust are mainly triggered by in-flight ambience and space/function. Satisfaction and affective commitment play a more important role in behavioural intentions. As expected, the findings do not reveal significant differences associated with the paths between low-cost carriers and legacy airlines in short-haul flights in Europe. Nevertheless, compared with less mindful passengers, mindful ones tend to be more critical about in-flight attributes and do not easily develop a committed relationship.     

The Optimal Speed of Transition: A General Equilibrium Analysis

We present a benchmark model for the optimal speed of transition from a state-owned to a private market economy, based on the consumption-savings decision in a closed economy. We abstract from frictions to focus on the macroeconomic conditions for accumulation of private capital and closure or restructuring of state-owned enterprises. It is shown that hard budget constraints compensate for too slow speed of enterprise closure but that an excess speed of closure may slow down transition because of output contraction effects. This will especially be the case if such a deviation occurs at early stages of transition.