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Full-Text Articles in Social and Behavioral Sciences

Exchange Rate Regimes And Nominal Wage Comovements In A Dynamic Ricardian Model, Yao Tang, Yoshinori Kurokawa, Jiaren Pang Oct 2013

Exchange Rate Regimes And Nominal Wage Comovements In A Dynamic Ricardian Model, Yao Tang, Yoshinori Kurokawa, Jiaren Pang

Economics Department Working Paper Series

We construct a dynamic Ricardian model of trade with money and nominal exchange rate. The model implies that the nominal wages of the trading countries are more likely to exhibit stronger positive comovements when the countries fix their bilateral exchange rates. Panel regression results based on data from OECD countries from 1973 to 2012 suggest that countries in the European Monetary Union (EMU) experienced stronger positive wage comovements with their main trade partners. When we restrict the regression to the subsample of the EMU countries, we find a significant increase in wage comovements after these countries joined the EMU in …


The (Far) Backstory Of The U.S.-Colombia Free Trade Agreement, Stephen Meardon Oct 2013

The (Far) Backstory Of The U.S.-Colombia Free Trade Agreement, Stephen Meardon

Economics Department Working Paper Series

In two pairs of episodes, first in 1824 and 1846 and then in 1892 and 1935, similar U.S.-Colombia trade agreements or their enabling laws were embraced first by protectionists and then by free traders. The history of the episodes supports the view that although political institutions exist to curb de facto political power, such power may be wielded to undo the institutions’ intended effects. The doctrinal affinities and interests of political actors are more decisive determinants of the free-trade or protectionist orientation of trade agreements than the agreements’ texts or legal superstructures. The long delay from signing to passage of …


On Kindleberger And Hegemony: From Berlin To M.I.T. And Back, Stephen Meardon Sep 2013

On Kindleberger And Hegemony: From Berlin To M.I.T. And Back, Stephen Meardon

Economics Department Working Paper Series

The most notable idea of Charles P. Kindleberger’s later career is the value of a single country acting as stabilizer of an international economy prone to instability. It runs through his widely read books, The World in Depression, 1929-1939 (1973), Manias, Crises, and Panics (1978), A Financial History of Western Europe (1984), and kindred works. “Hegemonic stability,” the idea is called in the literature it inspired. This essay traces Kindleberger’s attachment to the idea back to his tenure as chief of the State Department’s Division of German and Austrian Economic Affairs from 1945 to 1947 and adviser to the …


Implementing The Optimal Provision Of Ecosystem Services, Stephen Polasky, David Lewis, Andrew Plantinga, Erik Nelson Aug 2013

Implementing The Optimal Provision Of Ecosystem Services, Stephen Polasky, David Lewis, Andrew Plantinga, Erik Nelson

Economics Department Working Paper Series

Many ecosystem services are public goods whose provision depends on the spatial pattern of land use. The pattern of land use is often determined by the decisions of multiple private landowners. Increasing the provision of ecosystem services, while beneficial for society as a whole, may be costly to private landowners. A regulator interested in providing incentives to landowners for increased provision of ecosystem services often lacks complete information on landowners’ costs. The combination of spatially-dependent benefits and asymmetric cost information means that the optimal provision of ecosystem services cannot be achieved using standard regulatory or payment for ecosystem services (PES) …


The Effects Of Exchange Rates On Employment In Canada, Yao Tang, Haifang Huang, Ke Pang Jun 2013

The Effects Of Exchange Rates On Employment In Canada, Yao Tang, Haifang Huang, Ke Pang

Economics Department Working Paper Series

Under the flexible exchange rate regime, the Canadian economy is constantly affected by fluctuations in exchange rates. This paper focuses on employment in Canada. We find that appreciations of the Canadian dollar have significant effects on employment in manufacturing industries; such effects are mostly associated with the export-weighted exchange rate and not the import-weighted exchange rate. The export-weighted exchange rate elasticity of employment is -0.52. However, we also find that exchange rate fluctuations have little impact on Canada’s nonmanufacturing employment. Because the manufacturing sector accounts for only about 10% of the employment in Canada, the overall employment effect of exchange …


Liberal Egalitarianism And The Harm Principle, Michele Lombardi, Kaname Miyagishima, Roberto Veneziani May 2013

Liberal Egalitarianism And The Harm Principle, Michele Lombardi, Kaname Miyagishima, Roberto Veneziani

Economics Department Working Paper Series

This paper analyses the implications of classical liberal and libertarian approaches for distributive justice in the context of social welfare orderings. An axiom capturing a liberal non-interfering view of society, named the Weak Harm Principle, is studied, whose roots can be traced back to John Stuart Mill’s essay On Liberty. It is shown that liberal views of individual autonomy and freedom can provide consistent foundations for social welfare judgments, in both the finite and the infinite context. In particular, a liberal non-interfering approach can help to adjudicate some fundamental distributive issues relative to intergenerational justice. However, a surprisingly strong …


How Did Exchange Rates Affect Employment In Us Cities?, Yao Tang, Haifang Huang May 2013

How Did Exchange Rates Affect Employment In Us Cities?, Yao Tang, Haifang Huang

Economics Department Working Paper Series

We estimate the effects of real exchange rate movements on employment in US cities between 2003 and 2010. We explore the differences in the composition of local industries to construct city-specific changes in exchange rates and estimate their effects on local employment in manufacturing industries and in nonmanufacturing industries. Controlling for year and city fixed effects, we find that a depreciation of the US dollar increased local employment in the manufacturing industries, our proxy for the tradable sector. The depreciation also increased employment in the nonmanufacturing industries, the nontradable sector. Furthermore, the effects on nonmanufacturing employment were stronger in cities …


The Measurement Of Labour Content: A General Approach, Naoki Yoshihara, Roberto Veneziani May 2013

The Measurement Of Labour Content: A General Approach, Naoki Yoshihara, Roberto Veneziani

Economics Department Working Paper Series

This paper analyses the theoretical issues related to the measurement of labour content in the context of general technologies with heterogeneous labour. A novel axiomatic framework is used in order to formulate the key properties of the notion of labour content and analyse its theoretical foundations. Then, a simple measure of labour content is uniquely characterised, which is consistent with common practice in input-output analysis and with a number of recent approaches in value theory.


Social Democracy And Distributive Conflict In The Uk, 1950- 2010, Carlo V. Fiorio, Simon Mohun, Roberto Veneziani May 2013

Social Democracy And Distributive Conflict In The Uk, 1950- 2010, Carlo V. Fiorio, Simon Mohun, Roberto Veneziani

Economics Department Working Paper Series

In the last three decades, two questions have been central for the Left. Is there a future for electoral socialism and social democracy? And, is it any longer possible to promote a significant redistribution of income in favour of labour? Political and economic events seem to suggest negative answers. In his influential work, Adam Przeworski suggests that this is an irreversible trend that makes it impossible in the long-run to promote genuinely socialist objectives in capitalist democracies. In particular, the structural dependence of labour on capital severely constrains feasible income distributions. In this paper, a detailed quantitative and qualitative analysis …


The Effects Of Corporate Governance On The Innovation Performance Of Chinese Smes, Yao Tang, Daniel Shapiro, Miaojun Wang, Weiying Zhang Mar 2013

The Effects Of Corporate Governance On The Innovation Performance Of Chinese Smes, Yao Tang, Daniel Shapiro, Miaojun Wang, Weiying Zhang

Economics Department Working Paper Series

We investigate the degree to which corporate governance and ownership affects the innovation performance of firms in China with a particular focus on privately owned small and medium enterprises (SMEs). We hypothesize that (1) board-related governance measures will enhance innovation because they improve monitoring and provide access to necessary resources; (2) ownership concentration initially facilitates innovation because large shareholders are more likely to commit to the long-term nature of innovation, and have the incentive to monitor managers whose time horizon may be shorter; however we argue that these effects weaken as large shareholders becomes entrenched at higher levels of concentration; …


Motherhood And The Lesbian Wage Premium, Alyssa Schneebaum Mar 2013

Motherhood And The Lesbian Wage Premium, Alyssa Schneebaum

Economics Department Working Paper Series

A puzzle has emerged from studies examining the wage effects of sexual orientation for women. Although lesbian and bisexual women face discrimination in the labor market, most studies of the wages of female full-time workers in same-sex couples versus those in different-sex couples find that the lesbians earn more, even controlling for differences in present labor market supply, education, years of experience, area of residence, and occupation. However, previous studies of the sexual orientation wage gap consistently suffer from two important omissions: first, the role of motherhood in the straight-lesbian wage gap has not been adequately addressed, and second, researchers …


Power, Luck And Ideology In A Model Of Executive Pay, Peter Skott, Frederick Guy Feb 2013

Power, Luck And Ideology In A Model Of Executive Pay, Peter Skott, Frederick Guy

Economics Department Working Paper Series

The microprocessor and related technologies have transformed corporate and industry structure; applied in a neo‐liberal environment, the technologies have had profound effects on the relative power of different groups. Skott and Guy (2007) and Guy and Skott (2008) formalized one aspect of this process of power‐biased technical change: firms' increased ability to monitor low‐paid employees and the resulting changes in inequality and employment at the low end of the income distribution. This paper addresses power biases and income inequality at the high end. Increasing firm‐level financial volatility has intensified the agency problem and increased the power of corporate executives. These …


Accumulation, Structural Change, And External Balances In A World With Internationally Traded Environmental Assets, Arslan Razmi Jan 2013

Accumulation, Structural Change, And External Balances In A World With Internationally Traded Environmental Assets, Arslan Razmi

Economics Department Working Paper Series

Environmental literature has largely neglected macroeconomic considerations, especially open economy ones. This paper develops a small country framework that seeks to address these issues. Medium- and long-run aspects are explored using standard trade and portfolio balance models, modified to incorporate trade in claims on non-renewable resources (environmental assets). In the medium-run, changes in environmental regulations, saving behavior, and other variables affect the current account, investment, and composition of output. In the long-run, both the sectoral intensity of environment use and the structure of the economy are affected, as are the capital stock and the global distribution of claims on resources.


Financialization And The Nonfinancial Corporation: An Investigation Of Firm-Level Investment Behavior In The U.S., 1971-2011, Leila E. Davis Jan 2013

Financialization And The Nonfinancial Corporation: An Investigation Of Firm-Level Investment Behavior In The U.S., 1971-2011, Leila E. Davis

Economics Department Working Paper Series

Changes in the portfolio and financing behavior of nonfinancial corporations (NFCs) over the post-1970 period point to the financialization of the nonfinancial corporation and raise the question of accompanying changes in fixed investment behavior. Using a firm-level panel, this paper econometrically investigates the relationship between financialization and investment, exploring the implications of changes in financing behavior, increasingly entrenched shareholder value norms, and rising firm-level demand volatility for investment by NFCs in the U.S. between 1971 and 2011. Shareholder value norms and firm-level volatility are, in particular, identified as characteristics of the post-1970 U.S. economy that are associated with a significant …


On The Ricardian Invariable Measure Of Value In General Convex Economies: Applicability Of The Standard Commodity, Kazuhiro Kurose, Naoki Yoshihara Jan 2013

On The Ricardian Invariable Measure Of Value In General Convex Economies: Applicability Of The Standard Commodity, Kazuhiro Kurose, Naoki Yoshihara

Economics Department Working Paper Series

The purpose of this paper is to examine the critical arguments made by Burmeis ter, Samuelson, and others, with respect to Sraffa (1960). Sraffa did not address these arguments, but they are relevant from the viewpoint of modern economic theories. In his arguments about the standard commodity, Sraffa assumed that a change in in- come distribution has no effect on the output level and choice of techniques. However, modern economic theories allow interdependence among changes in income distribution, output level, and choice of techniques. Therefore, it is interesting to consider the existence of an invariable measure of value and linearity …


Public Debt In An Olg Model With Imperfect Competition: Long-Run Effects Of Austerity Programs And Changes In The Growth Rate, Peter Skott, Soon Ryoo Jan 2013

Public Debt In An Olg Model With Imperfect Competition: Long-Run Effects Of Austerity Programs And Changes In The Growth Rate, Peter Skott, Soon Ryoo

Economics Department Working Paper Series

We show that (i) dynamic inefficiency may be empirically relevant in a modified Diamond model with imperfect competition, (ii) if fiscal policy is used to avoid inefficiency and maintain an optimal capital intensity, the required debt ratio will be inversely related to the growth rate, and (iii) austerity policies reductions in government consumption and entitlement programs for the old generation raise the required debt ratio.


Environmental Macroeconomics: Simple Stylized Frameworks For Short-Run Analysis, Arslan Razmi Jan 2013

Environmental Macroeconomics: Simple Stylized Frameworks For Short-Run Analysis, Arslan Razmi

Economics Department Working Paper Series

Environmental economics has mostly focused on micro issues pertaining to welfare and efficiency analysis. I develop a general framework to address short-run issues both for a closed economy and for an open one where emission permits are globally traded. Fiscal policy and emission permit issuance can both be used as short-run stabilization tools in a closed economy although the former is ineffective in a small open economy. In a large open economy, issuing emission permits in excess of international agreements remains an effective instrument, although it acts as a beggar-thy-neighbor policy, highlighting the crucial role of global monitoring on macroeconomic …


Technology, Power And The Political Economy Of Inequality, Frederick Guy, Peter Skott Jan 2013

Technology, Power And The Political Economy Of Inequality, Frederick Guy, Peter Skott

Economics Department Working Paper Series

Technology can affect the distribution of income directly via its influence on both the bargaining power of different parties and the marginal product of different factors of production. This paper focuses mainly on the first route. The role of power is transparent in the case of medieval choke points but modern network technologies have similar features. There is also substantial evidence ‐‐ from truckers and retail clerks to CEOs ‐‐ that power affects the determination of wages. But power relations inevitably have institutional dimensions; regulatory frameworks influence industry structures and the market power of large companies as well as the …


Correctly Analyzing The Balance Of Payments Constraint On Growth, Arslan Razmi Jan 2013

Correctly Analyzing The Balance Of Payments Constraint On Growth, Arslan Razmi

Economics Department Working Paper Series

The BPCG model provides an interesting hypothesis regarding economic growth. The main implication is that world demand places a constraint on individual country performance. I discuss this implication and argue that tests of the BPCG model have essentially been tests of the hypothesis that trade is balanced over the long run; a plausible hypothesis but one that need not hold mainly due to demand-side constraints. I then discuss the role of relative prices and investment, point out logical inadequacies in the traditional BPCG framework, and suggest an alternative theoretical framework to investigate its robustness. Our theoretical and empirical explorations contribute …


The Real Exchange Rate And Economic Growth: Some Observations On The Possible Channels, Martin G. Rapetti Jan 2013

The Real Exchange Rate And Economic Growth: Some Observations On The Possible Channels, Martin G. Rapetti

Economics Department Working Paper Series

No abstract provided.