We examine proposals to introduce national insurance against unevenly distributed shocks in the European Community. This insurance would operate differently from tax and government spending activities that now yield regional insurance within countries, since these activities are mainly designed for other purpose such as income redistribution and general revenue-raising. According to our evidence, the appeal of such insurance is very limited because the risks are too highly correlated and there is an excessive chance that a country in difficulty would not receive aid. The costs of a continuing programme are likely to exceed the benefits.

The proposition that imports may constrain domestic competition and ought to be encouraged on at least monopoly welfare loss grounds is neither new nor very frequently challenged. In this paper, we should like to present several reflections on the literature — empirical and theoretical — associated with this proposition, and to sketch the outlines of two further empirical exercises which we believe capable of yielding information on some aspects of this general view.

It is becoming increasingly accepted that industry conduct ought to play an important role in our theorizing about oligopoly, and that structural indices can be poor, and occasionally quite inaccurate reflections of the more complex reality of industry performance. In this section, we should like to explore this insight in the context of competition in an open economy.

This article presents a proof of Arrow’s Theorem which highlights the theorem’s relationship to welfarism and which emphasizes its underlying geometric structure. In addition, this method of proof is adapted to provide a proof of a single-preference-profile version of Arrow’s Theorem. The relationship between Arrovian social choice theory and Bergson-Samuelson welfare economics is also considered.

This paper proposes a new kind of asymmetric GARCH where the conditional variance obeys two different regimes with a smooth transition function. In one formulation, the conditional variance reacts differently to negative and positive shocks while in a second formulation, small and big shocks have separate effects. The introduction of a threshold allows for a mixed effect. A Bayesian strategy, based on the comparison between posterior and predictive Bayesian residuals, is built for detecting the presence and the shape of non-linearities. The method is applied to the Brussels and Tokyo stock indexes. The attractiveness of an alternative parameterisation of the GARCH model is emphasised as a potential solution to some numerical problems.

Methods for nonparametric estimation and comparison of cross section Engel curves are presented and applied to U.K. expenditure data. Real Engel curves (with quantity demanded and real total expenditure on the axes) vary over time, but their shapes are generally quite stable. Mean normalized Engel curves are defined and are found not to vary greatly over time. Consequences of such invariance for the testing of microeconomic demand models are investigated.

We investigate the impact of innovative work practices on working conditions. We use a unique French dataset providing information on individual workers for year 1998. New work practices which play a key role in the success of the new economy, include job rotation and the use of quality norms. Working conditions are captured by occupational injuries as well as indicators of mental strain. Using Rubin’s causal model, we show that, even after controlling for employee and job characteristics and correcting for sample selection bias, workers involved in the new work practices still face working conditions that are significantly worse than those of non innovative workers.

1. L’observation des faits économiques a conduit certains économistes, y compris l’auteur du présent article, à conférer aux exportations un rôle important dans l’explication de la croissance économique de l’Europe depuis la fin de la guerre. Ce «rôle important» doit être entendu dans un sens large, dépassant celui d’une simple incitation à l’expansion. La demande extérieure peut, en effet, au même titre que n’importe quelle composante de la demande intérieure, déclencher un processus de croissance. On sait, par exemple, que le développement de l’économie britannique au XIXe siècle doit beaucoup aux exportations de coton, de fer et de charbon. La pression de la demande étrangère sur les ressources nationales crée non seulement des revenus; elle peut aussi engendrer des innovations et aboutir à la création d’activités connexes.

Les études auxquelles nous faisons allusion attribuent un rôle plus persistant à l’essor des exportations. Celui-ci est censé entretenir le processus de croissance; son affaiblissement devrait donc, toutes choses égales d’ailleurs, ralentir l’expansion. L’objet de cet article est de rendre explicite le raisonnement théorique qui soustend la thèse défendue dans ces écrits.

During the 1980s and 1990s the argument that “maximizing shareholder value” results in superior economic performance came to dominate the corporate governance debates. In this paper, I outline the rationale for the shareholder-value perspective, and show that, rooted in agency theory, it lacks a theory of innovative enterprise. Hence it cannot be used to analyze the conditions under which the stock market supports or undermines the process of value-creation. To go beyond agency theory and its shareholdervalue perspective, I present a framework for analyzing the functions of the stock market in the business corporation and the influence of these functions on the social conditions of innovative enterprise. I then use this framework to explain why in the United States since the 1990s there has been a widespread trend in corporate stock repurchases, including a sharp acceleration in buybacks since 2003. Focusing on a list of the largest corporate repurchasers in the United States, I raise questions concerning the relation between stock buybacks and value-creating investments in the US economy as a whole. I conclude with a discussion of why companies do stock repurchases, and in particular whether they can be justified as a contribution to innovative enterprise. I argue that the ultimate justification for stock repurchases is the ideology of “maximizing shareholder value” - an ideology that works to the direct benefit of corporate executives who make corporate resource allocation decisions and who derive high levels of remuneration from munificent stock option awards.

This paper analyses unilateral trade liberalisation in a Cournot duopoly model where the domestic and the foreign firm have different marginal costs. There are three results in the paper. Firstly, with linear demand, it is shown that the domestic country will lose as a result of unilateral free trade unless the foreign firm has a significant cost advantage. Secondly, it is shown that a sufficient condition for there to be gains from unilateral free trade is that the domestic firm is so uncompetitive that it ceases production under free trade. This result is generalised to the case of a Cournot oligopoly with non-linear demand. Thirdly, it is shown that there will always be gains from unilateral free trade with constant elasticity demand functions whatever the elasticity of demand or the relative costs of the domestic and foreign firms.

This paper studies duration of inter-firm contracts in a transaction cost perspective. The aim of the paper is to test the propositions that can be derived from a transaction-cost framework. We built a non-truncated database representing the entire contractual relationships of Electricité de France (EDF) with its coal carriers and coal unloaders over the period 1977–1997. Section I explores factors that can explain the choice of contract duration. Section II describes the relationships between EDF and its suppliers. In Section III, we test and confirm most propositions derived from transaction-cost theory that relate contract duration to transaction characteristics. We believe this study to be the first attempt (1) to confirm transaction cost economics propositions using French data and (2) to endogenize asset specificity level at stake in transactions.

Les institutions, conçues comme des entités collectives autonomes contribuant à la régulation du système socio-économique, ont été progressivement endogénéisées d’abord par la théorie économique, puis par la théorie des jeux. Elles ont pour rôle de résoudre des problèmes de coordination entre les agents, en particulier ceux qui découlent de l’absence, de la multiplicité ou de la non optimalité des équilibres spontanés. Pour ce faire, elles peuvent d’abord multiplier le nombre d’équilibres possibles, ensuite sélectionner l’un d’entre eux, en étant autant que possible auto-validées par les agents et non imposées de l’extérieur. Cependant, même si l’institution peut soutenir un équilibre spécifique, il faut rendre compte de sa genèse sinon par le pur raisonnement des agents, du moins par un processus d’apprentissage ou d'évolution.

This paper provides a simple matching model in which unemployed workers and employers can be matched together through social networks or through more “formal” methods of search. We show that, in some case, networks substitute for labor market and that this crowding-out effect may be socially costly. For that reason, a policy increasing the social capital of the disadvantaged workers can increase the unemployment rate and decrease workers' output.

L'objectif de cet article est de tester économétriquement l'existence d'interactions spatiales entre les choix d'imposition des départements français de métropole. Pour cela, un modèle de choix fiscal avec autorégression spatiale est spécifié pour estimer la pente de la fonction de meilleure réponse qui relie le taux d'impôt d'un département aux taux votés par les départements voisins pour le même impôt. Nous montrons que pour l'année 1999, l'hypothèse d'interactions fiscales horizontales ne peut être rejetée pour trois des quatre impôts départementaux étudiés, notamment pour la taxe professionnelle qui pèse uniquement sur les entreprises. À l'inverse, la fixation du taux départemental de la taxe d'habitation, qui pèse uniquement sur les ménages, ne semble pas gouvernée par les décisions des départements concurrents. Ces résultats sont compatibles à la fois avec les modèles de concurrence fiscale à la Wildasin (1988) et ceux de concurrence par comparaison à la Besley et Case (1995a).

Ever since the breakdown of the Bretton Woods System, there has been a chorus of economists calling for internationally negotiated coordination of macroeconomic policies. Most of them work for international organisations or have developed a special interest in discretionary macro-policy or optimal-control theory.

At the same time, very little centralised coordination has actually taken place. Exchange rate surveillance by the International Monetary Fund does not seem to have played a major role. The economic summit meetings are not used to coordinate macro-policy any longer. Even the first Bonn Summit (1978), the apparent showpiece of centralised coordination, does not seem to have yielded internationally negotiated macroeconomic policy concessions from national governments, but rather enabled their leaders to pursue their domestic objectives against strong internal opposition.

This article examines the influence of equity ownership structure (stock market listing and identity of shareholders) on human resource management practices. The empirical analysis uses the 2004-2005 Workplace Industrial Relations Survey (REPONSE survey), based on a sample of 2930 establishments with 20 employees or more, representative of the French private sector. Our findings confirm the importance of listing and, to a lesser extent, of the identity of shareholders as determinants of human resource management practices, considering temporary work arrangements (agency work, fixed-term contracts and sub-contracting), pay policy (wage levels and use of variable pay) and training expenditures.

Public sales art catalogues include low and high pre-sale price estimates by experts. This makes it possible to analyze whether pre-sale estimates are unbiased predictors of realized prices. Unbiasedness is tested using a sample of some 1,600 lots of English silver auctioned by Christie’s and Sotheby’s. Results show that estimates are slightly (but significantly) biased and that experts do not use all the information that is available to them when they make their estimates.

Many practical decisions, in medicine and elsewhere, alter the lengths of people’s lives; many affect the number of people who are born; and many do both. Decision makers need to attach a value to changes of these sorts. In the past the value of prolonging life and the value of changes in population have generally been treated separately. This paper explains the need for an integrated treatment: a theory of the value of living. In one sense, prolonging a life and bringing into existence an extra person are alternative ways of doing the same thing: both bring it about that a period of life is lived that otherwise would not have been lived. But there is also a vital difference: in one case the extra period of life comes to someone who exists already; in the other it comes to a new person. The paper discusses a number of principles that might be used in developing an integrated theory of the value of living.

Using a new data set that allows us to analyze precisely the research output in all fields of science, we show that the gap in scientific performance between Europe, especially continental Europe, and Anglo-Saxon countries, especially the USA, is large. We measure research quality by the number of highly cited researchers in nineteen selected scientific fields. After controlling for different variables, such as par capita GDP and outlays in R&D, the differences in productivity between Anglo-Saxon countries and other countries are explained, not surprisingly, by the importance of English proficiency, but also by the quality of institutions and of governance of the countries in the studied sample, the latter being in all likelihood highly correlated with the governance quality of research institutions.

Illyrian labour-managed firms may have positively-inclined Cournot reaction functions. Consequently, in a “mixed” duopoly a determinate equilibrium can result in which the profit-maximising firm leads and the labour-managed firm follows. A simple example demonstrates this.