Estimation of the Natural Unemployment Rate in the Russian Federation, 1994–2004

To specify the problem of unemployment in Russia, we estimate the natural rate of unemployment by consecutively estimating the optimal size of the labour force and the optimal employment. For estimation of the optimal values we used a modified Hodrick–Prescott filter technique. The results show that the natural rate of unemployment in Russia during 1994–97 was stable around 13–13.5% and decreased to 7.1% by mid-2004. Moreover, before 1998 the actual unemployment was significantly lower than the natural rate and today practically equals it.     

BUNDLING IN AUCTIONS WITH NON‐LINEAR VALUATIONS*

We examine when a revenue‐maximising auctioneer prefers to auction a homogenous product in one bundle (a single‐object auction) than to sell the item in two or more shares. When the items are super‐additive the auctioneer always prefers a single‐object auction. When the product valuations are sub‐additive, the auctioneer is more likely to choose a share auction when there are a large number of potential bidders. When there are a small number of bidders the auctioneer will tend to prefer a single‐object auction.     

Winning,then Losing,the Battle with Globalization: Vietnamese Petty Traders in Slovakia

This article addresses the remarkable growth of Vietnamese market trading in Central and Eastern Europe, notably Slovakia, in the early 1990s, and its subsequent decline. The literature on ethnic entrepreneurship and cross‐border petty trading provides partial insights into this phenomenon, but fails to explain the levels of concentration of the Vietnamese in market trading, or the rapid changes in this sector. We therefore conceptualize them as being at the nexus of shifting flows of capital, goods and people, and draw on the notion of transnational spaces. L’article aborde le commerce du Vietnam en Europe centrale et de l’Est, notamment en Slovaquie, lequel a connu un remarquable essor au début des années 1990 suivi d’un déclin. Les travaux sur l’esprit d’entreprise ethnique et le petit commerce transfrontalier n’offrent qu’un éclairage partiel de ce phénomène, sans expliquer les niveaux de concentration des Vietnamiens dans le commerce ni les rapides transformations de ce secteur. L’article les conceptualise donc comme le c?ur des flux changeants de capitaux, marchandises et populations en s’inspirant de la notion d’espaces transnationaux.     

Wanna Dance? How Firms and Underwriters Choose Each Other

We develop and test a theory explaining the equilibrium matching of issuers and underwriters. We assume that issuers and underwriters associate by mutual choice, and that underwriter ability and issuer quality are complementary. Our model implies that matching is positive assortative, and that matches are based on firms' and underwriters' relative characteristics at the time of issuance. The model predicts that the market share of top underwriters and their average issue quality varies inversely with issuance volume. Various cross‐sectional patterns in underwriting spreads are consistent with equilibrium matching. We find strong empirical confirmation of our theory.     

The Interdependent and Intertemporal Nature of Financial Decisions: An Application to Cash Flow Sensitivities

We develop a dynamic multiequation model where firms make financing and investment decisions jointly subject to the constraint that sources must equal uses of cash. We argue that static models of financial decisions produce inconsistent coefficient estimates, and that models that do not acknowledge the interdependence among decision variables produce inefficient estimates and provide an incomplete and potentially misleading view of financial behavior. We use our model to examine whether firms are constrained from accessing capital markets. Unlike static single‐equation studies that find firms underinvest given cash flow shortfalls, we conclude that firms maintain investment by borrowing.     

Why Is Canada's Price Level So Predictable?

This paper draws attention to the fact that the price level in Canada—which is an inflation targeter—has strayed little from the path it would have taken had inflation never wandered off the 2% target since its introduction and has tended to revert to that path after temporary deviations. Econometric analysis using Bayesian estimation suggests that a low probability can be assigned to explaining this behavior by mutually offsetting shocks. More plausible is the assumption that inflation expectations and interest rates are determined in a way that is consistent with an element of price‐level‐path targeting.     

Does Reputation Limit Opportunistic Behavior in the VC Industry? Evidence from Litigation against VCs

We examine the role of reputation in limiting opportunistic behavior by venture capitalists towards four types of counterparties: entrepreneurs, investors, other VCs, and buyers of VC‐backed startups. Using a hand‐collected database of lawsuits, we document that more reputable VCs (i.e., VCs that are older, have more deals and funds under management, and syndicate with larger networks of VCs) are less likely to be litigated. We also find that litigated VCs suffer declines in future business relative to matched peers. These declines are larger for more reputable VCs, and for VCs that are defendants to multiple lawsuits or sued by entrepreneurs.     

LINKAGES BETWEEN EXCHANGE RATE POLICY AND MACROECONOMIC PERFORMANCE

Using a sample of 104 countries, we study macroeconomic performance from 1973 to 2007. We examine GDP growth, inflation rate, growth volatility and inflation volatility, and their response to a ‘words versus deeds’ measure of exchange‐rate policy, which is obtained by interacting a country's de jure and its de facto policy. For non‐industrialized countries, the highest growth rates and the lowest inflation volatility are associated with countries that pursue fear of floating policy, whereas countries that pursue a matched float policy (de jure and de facto floating) have the highest inflation rates but the lowest GDP volatility.