The impact of (more) enlargement on the European Employment Strategy

The European Union (EU) aspires to be the most competitive, full employment economy in the world and has set a number of ambitious targets to be met by 2010 in order that it can achieve this goal. At the same time, it is pursuing an enlargement policy that will witness the accession of an increasing number of less developed nations. This article explores some of the tensions that exist between these two goals as these are manifest in labour market indicators and finds the likelihood of meeting the deadline set for success remote.     

The Impact of Foreign Technology and Embodied R&D on Productivity in Internationally Oriented and High-Technology Industries in Egypt, 2006–2009

This paper investigates the domestic productivity and spillover effects of foreign technology and embodied R&D on Egyptian manufacturing industries, 2006 to 2009. It also analyses the heterogeneous sectoral effects of technology transfer by focusing specifically on the productivity effects on highly internationalized and technology-intensive industries. These are expected to have greater absorptive capacity with respect to foreign technology and therefore larger productivity effects because of their greater exposure to foreign competition and greater technological capacity respectively. This study is the first to analyse the efficiency effects of foreign technology by classifying industries in this manner. It finds that foreign technology and embodied R&D have positive and significant industry-specific effects on domestic productivity and TFP in technology-intensive industries but that these are weaker in internationally oriented industries. The study suggests that only technological-intensive industries in Egypt have sufficient absorptive capacity to assimilate foreign technology effectively. The paper’s findings highlight the key role of foreign technology in domestic productivity growth, subject to the absorptive capacity of the domestic labour force, and the need for improved policies to promote the domestic benefits of technology transfer through the accumulation of local technological competences.

     

Enlargement and the labour market: perception,theory and fact

Favourable labour market outcomes are essential for economic and social cohesion within the newly enlarged European Union. However, Eurobarometer evidence indicates that many in the 10 incoming countries are not convinced that membership will deliver such a result. Also, there is no unambiguous theoretical framework that suggests otherwise. A more optimistic scenario can be obtained by reference to the experiences of earlier low‐income Community entrants during their first years of membership, although long‐term convergence has remained elusive.     

The Year of Workers’ Mobility

The year 2006 is the European Year of Workers’ Mobility. This article seeks to assess how effective such a designation might be in the context of the problems that currently confront the EU. While it finds that the underlying potential is significant, the reality is that the year has been framed more with political than with social and economic goals to the fore and the result is a disappointment.     

Human behaviour in development economics

The focus of the paper is human behaviour in long-run change as examplified in the writings of the ‘pioneer’ development economists, Lewis, Hirschman and Myrdal. Lewis is credited with recognizing the importance of human behaviour, though unable to resolve the limitations of neoclassical thinking. Hirschman and Myrdal, characterized as holistic and evolutionary in approach, are argued to be more successful in integrating human behaviour into theories of long-run change.     

DEMAND ASYMMETRY AND MONEY ILLUSION WITH AN EXAMPLE-MILK

This paper examines the question of an asymmetric response by consumers to equivalent real price movements depending on whether the source of the real price movement is a change in the money price of the product itself or a change in the general price level. This asymmetry is discussed as a special but pervasive case of asymmetry due to limited information in an inflationary environment. A method is developed to capture possible asymmetric responses of this type by consumers with which it is possible to measure the degree of money illusion they exhibit. This method is then applied to the demand for milk using Australian data to show evidence of a considerable degree of money illusion.     

Paying for performance: Efficiency wages and mutuality

The motivation of individuals lies at the core of corporate governance. For CEOs much research has been directed at the linkage between pay and enterprise performance. The results, however, provide only weak support for the efficacy of profit-related pay. Herein we adopt a different perspective and test for the existence of efficiency wages in a mutual sector wherein the use of traditional control mechanisms is particularly problematic. Our empirical results support the hypothesis that efficiency wages do yield superior performance. We therefore conclude that efficiency wages are a much-needed tool of corporate governance in the mutual sector. Furthermore, as an incentive mechanism, efficiency wages do not require the observability of individual effort, thus they potentially provide an equitable incentive mechanism for all organizations.