Financial distress and the business cycle

In this paper we argue that firms' financial distress shouldplay a greater role in the macroeconomic analysis of the businesscycle. We provide a non-technical account of a general equilibriummodel that exhibits financially-driven equilibrium cycles. Weshow that the empirical evidence is widely supportive of thekey hypothesis and implications of our approach. We use themodel in order to evaluate the effects of several policy measures.It turns out that deepening the market for second-hand capitalgoods, subsidizing the interest payments of companies whichstart up when financial conditions are tight, and bailing outsome companies in default can indeed 'stabilize' the economy.By way of generalization, we may say that the policy reactionto a financially driven bust should be accommodating.     

The role of entry barriers in the development of the offshore supply sector in scotland

This paper examines the offshore oil supply sector and shows how the entry barriers experienced by new supply firms are imposed not by other supply firms but by the oil companies. This is done to ensure product quality and reliability of service rather than the more general attention to price considerations. The range of entry barriers are discussed in relation to key characteristics of the oil industry. As a spin-off this experience appears to have generated a more responsive attitude towards technological and commercial change throughout Scottish industry.     

The South African labour market, 1995–2015

This study investigates the changes in the South African labour market in the post-apartheid period. While unemployment increased over the 1995–2015 period, employment also increased. Nonetheless, the extent of employment increase is not rapid enough to absorb all net entrants into the labour force, resulting in increasing unemployment, or an employment absorption rate of 65.3%. Unemployment is concentrated in specific demographically and geographically defined groups, most notably Africans, the lowly educated and those aged below 30 years, residing in rural areas in Gauteng. Finally, four worrying findings are observed: youth jobseekers aged below 30 years struggle to find their first job; chronic unemployment is more serious for the relatively older jobseekers (aged 45 years or above) with past work experience; employees working for small, medium and micro enterprises still stagnate at approximately 3.5 million; and jobseekers from the older age cohorts are less likely to actively seek work by enquiring at workplaces and answering job advertisements.     

Disclosure, leaks, and slips: Issues and strategies for prohibiting employee communication

Both popular and social science literature are replete with recommendations for enhancing communication effectiveness, typically defined as improving the clarity and impact of the spoken and written word. However, managing internal organizational processes and external market competitiveness often requires a different communication strategy, specifically silence and non-disclosure, while adhering to statutory regulations. This article summarizes the rationale for communication prohibitions, highlights counter forces mitigating their intended effects, and offers recommendations for successful implementation. The three major counter forces are: employee motivation and perception, changing socio-cultural norms, and organizational structures reflecting virtual teams and project teams. The eight recommendations for combating these forces are subsumed under one of two categories: creating an organizational culture supporting prohibitions, and executing the prohibitions with a minimum of employee resistance. In summary, employees charged with maintaining secrecy and adhering to non-disclosure prohibitions must view those restrictions as reasonable, warranted, equitable, and legal.     

The Rocky Road to Privatization

Abstract . Three main types of privatization are found in the United States: (1) lower proportion of Gross National Product preempted by the public sector, leaving correspondingly more for the private sector, (2) transferring present government enterprises to private organizations; and (3) contracting out the production and delivery of services financed by public funds. Most discussions of “contracting out,” which come from the “public choice” school of economics and public administration, mainly emphasize theoretical economic advantages. They also suppose that the practice can eradicate political machinations. In contrast, this evaluation takes into account the practices’intensely political environment. Many of the advantages attributed to contracting out often are not realized. The practice in many cases can save money. But successes are likely to be achieved only with projects meeting certain narrow specifications.     

Economic impact of hypoglycemia among insulin-treated patients with diabetes

Objective: The objective of this study was to assess the cost of hypoglycemic events among insulin-treated patients with diabetes and the potential cost savings to a hypothetical US health plan and employer of reducing hypoglycemic events with a device intervention.

Methods: A cost-calculator model was developed to estimate the direct costs of hypoglycemic events, accounting for diabetes type, age, and event severity. Model inputs were derived from published incidence rates of hypoglycemic events and direct medical costs. Assumed intervention efficacy was based on published studies of an emerging technology which yielded 72.2% (LGS Trial; ACTRN12610000024044) and 31.8% (ASPIRE Trial; NCT01497938) reductions in severe and non-severe hypoglycemic events, respectively. Model outcomes—including the number of severe (requiring medical assistance) and non-severe events, and direct/indirect medical costs (excluding intervention costs)—were evaluated over a 1-year period for a hypothetical health plan and employer perspectives.

Results: In a health plan with 10 million enrollees, patients without the intervention would have experienced 0.09 and 14.60 severe and non-severe hypoglycemic events per patient per year (PPPY), respectively (vs 0.02 severe and 9.96 non-severe events with the intervention). This translated into total direct medical cost savings of $45 million ($177 PPPY) for the health plan. For an employer with 100,000 employees, the intervention would have yielded additional savings of $492 PPPY in indirect costs.

Conclusion: Insulin-treated patients experience hypoglycemic events, which are associated with substantial direct and indirect medical costs. The cost savings of reducing hypoglycemic events need to be weighed against the costs of using diabetes device interventions.