Profutures. The birth of the strategic prospective and futures studies international network for applied methodology

On 30 September and 1 October 1993, the European Commission's Institute for Prospective Technological Studies (PROMPT) organized a meeting, in collaboration with LIPS-CNAM (the Laboratory for Investigation in Prospective and Strategy of the Conservatoire National des Arts et Métiers in Paris), on the theme: ‘Methods and tools in strategic prospective: retrospective and perspectives’. The main outcome of this meeting, which brought together 23 international experts from the strategic prospective-futures studies field at the Ispra campus of the EC's joint Research Centre, was the creation of a new network, devoted to applied methodology, to be known as Profutures.     

Price Rigidity and the Selection of the Exchange Rate Regime

We evaluate and qualify Friedman's, 1953, “case for flexible exchange rates” in the presence of sticky prices in a two country model. We find that a flexible regime performs indeed better when the degree of nominal price rigidity is high while a bilateral peg does better when prices are fairly flexible. This result obtains independent of whether monetary policy is activistic or not and is mostly due to the negative relationship between employment and productivity shocks when prices are relatively sluggish (Gali, 1999). A unilateral peg tends to produce the lowest level of world welfare but it sometimes represents the best monetary arrangement for the pegger. JEL Classification Numbers: E32, E52, F33, F42     

Policy Determinants of School Outcomes under Model Uncertainty: Evidence from South Africa

In this paper, we assess the determinants of secondary school outcomes in South Africa. We use Bayesian model averaging techniques to account for uncertainty in the set of underlying factors that are chosen among a very large pool of explanatory variables in order to identify the subset of explanatory variables most strongly associated with the dependent variable. Our analysis indicates that the socio‐economic background of pupils, demographic characteristics such as population groups (Black and White), as well as geographical locations account for a significant variation in pupils’ achievement levels. We also find that the most robust policy determinants of pupils’ test scores are the availability of a library at school, the use of IT in the classroom as well as school climate.     

Liquidity and Arbitrage in Options Markets: A Survival Analysis Approach

This paper examines the determinants of the time it takes foran index options market to return to no arbitrage values afterput-call parity deviations, using intraday transactions datafrom the French index options market. We employ survival analysisto characterize how limits to arbitrage influence the expectedduration of arbitrage deviations. After controlling for conventionallimits to arbitrage, we show that liquidity-linked variablesare associated with a faster reversion of arbitrage profits.The introduction of an Exchange Traded Fund also affects thesurvival rates of deviations, but this impact essentially stemsfrom the reduction in the level of potential arbitrage profits.     

Compliance Costs for Employers: UK PAYE and National Insurance, 1995–96

This paper, based upon research financed by the Inland Revenue and the Contributions Agency of the DSS, presents calculations of the compliance costs for employers of PAYE and National Insurance in 1995–96. Total costs are estimated to have been of the order of £1.3 billion. The costs are very unequally spread across employers, whether measured per employee or per pound of tax raised. They are particularly high for small new employers. For the largest employers, these costs may be offset by the cash-flow benefits of acting as tax collectors. The composition of labour and other costs is calculated and estimates are made of compliance costs under various payroll ‘technologies’. The main determinants of compliance costs, for an employer, are analysed using weighted least-squares regression analysis. Finally, some policy implications are considered.     

From quality to innovation: Evidence from two French Employer Surveys

In this article we investigate the impact of quality systems on innovation performance using the method of propensity matching. We use two French microeconomic surveys, the “Organizational Changes and Computerization” (COI 1997) and the “Community Innovation Survey” (CIS3 1998–2000). The first hypothesis indicating that quality (ISO 9000 certification) impacts positively on innovation is supported for certain areas of innovation performance. Furthermore, the second hypothesis states that different levels of quality differentially improve innovation performance. Results indicate that the innovation performance of firms with Top Quality Level is higher than that of firms with Medium Quality Level which is also higher than that of firms with Low Quality Level for certain areas of innovation. However, we found that the difference in innovation performance between firms with Medium and Low Quality Levels is not of a great magnitude. This study implies that in order to achieve a significant innovation performance improvement via quality systems, a very well-established quality system is needed within a firm.