In a capitalist economy prices serve to equilibrate supply and demand for goods and services, continually changing to reallocate resources to their most efficient uses. Secondary stock market prices, however, often viewed as the most 'informationally efficient' prices in the economy, have no...

The usual analysis of privatization and X-inefficiency uses agency theory to model managerial effort. We model worker effort as determined by a bargain between firms and workers. Workers dislike effort because it lowers utility. Firms prefer high effort because it raises productivity....

This paper analyses the sources of post-war growth and convergence in the OECD using an extension of Mankiw, Romer and Weil's (1992) model in which the rate of technical progress is determined endogenously by the level of R&D spending and a process of technological catch-up. The results indicate...

A method of testing the relative importance for consumption of full insurance behaviour and changes in income is proposed and estimated using data across Canadian provinces. The focus of the estimation is less on whether or not the full insurance model can be rejected than on how much each of...

In this paper we evaluate the deterioration in the European sacrifice ratio implied (both in terms of inflation and unemployment) by the fact that labour markets are structurally different and there is very little labour mobility between the European Union countries. We also consider a wage...

This paper surveys the literature on monetary integration to discover the economic rationale of the Maastricht convergence requirements. The traditional theory of optimum currency areas is silent on the need to have Maastricht-type convergence requirements. The new view of monetary integration...

We investigate the nature of monitoring by stake holders using data on Japanese manufacturing firms. Shareholders and bank-centred corporate groups monitor firms by reducing activities with scope for managerial moral hazard such as advertising, R&D and entertainment expenses. Monitoring of this...

The paper evaluates the ability of asset pricing models that do not use consumption data, and models that use consumption data as a proxy for true consumption, to explain the time-series and cross-sectional variation of expected returns of portfolios of stocks. Although some parameter...

Economic development in East Germany is not uniform. The building and construction industry is booming but manufacturing industry is stagnating. The paper argues that severe distortions in relative factor prices are the cause of the dichotomous development. These distortions result from...

This paper examines some popular explanations for the smooth operation of the pre-1914 gold standard. We find that the rapid adjustment of economies to underlying disturbances played an important role in stabilizing output and employment under the gold standard system, but no evidence that this...