Scotland as an Optimal Currency Area

Since the Scottish independence movement has reached the point that there will be a referendum on Scottish independence this September, the issue of whether the Scotland is optimal currency areas is very topical.In this paper we review the microeconomic foundations of an optimal currency area. We test these microeconomic foundations. We find that the UK, Scotland and the UK without Scotland meet the microeconomic criteria for a common currency area. While adopting a common currency is ultimately a political decision, these results imply that the broadest of these areas, the UK, is the optimal currency area in the sense of minimizing transactions costs.We do find differences in the UK less Scotland and Scotland economies in loan data. We further find that neither the euro bloc nor the euro bloc including Scotland meet the microeconomic criteria for a common currency area. In the event of a “yes” vote for Scottish independence, the immediate problem facing the Scottish government is to decide on an exchange rate regime that is seen as credible by the financial markets to avoid a flight of capital. How policymakers chooses between alternative exchange rate regimes is currently a topic for hot debate in central banking circles and the process of a monetary union breaking up is a fascinating area worthy of future research

International Comparisons and Transfer of Labour Market Institutions

International comparisons of labour market institutions and their transfer across boundaries have gained in importance. The paper deals with the question of the best way to proceed in making such comparisons. At the same time the question of the possibilities and limits to institutional transfer is addressed. On the one hand competition between systems obliges governments to adopt institutions of other countries. On the other hand inflexibilities resulting from path dependency and/or powerful domestic interest groups can impede the transfer of institutions.

On methodology in macroeconomics-with application to the demand for unskilled labour

Kurt W. Rothschild Lecture, Johannes Kepler University, Linz, 22 November 2001.

The Anti-Keynesian Tradition: Introduction

The first volume of this trilogy examined the Keynesian Tradition; this second volume examines aspects of the Anti Keynesian Tradition. All the chapters are designed, in part, to justify the assertion that economists neglect at their peril the subterranean world in which our subject is constructed. Archival evidence provides numerous unique insights but can also resolve disputes that may otherwise meander along, endlessly. Equally, archival evidence can expose as hollow some of the creation myths that pervade the account of intellectual revolutions. ISBN: 978140394959

Macro- and microeconomic consequences of wage rigidity

An exploration of the micro- and macroeconomic theories, implications, and evidence of wage rigidity from the perspective of human resource managers and economic researchers, showing that human resource policies can subtly alter the rigidity of wages.Unemployment ; Wages

NATIONAL COMPETITIVENESS BETWEEN CONCEPT AND REALITY. SOME INSIGHTS FOR ROMANIA

Competitiveness represents, now more than ever, one of the most desirable attribute an entity (country, region or firm) is looking for on the global arena. The evolutions that took place (for the last few years) into the "real world" and into the "academic field" as well, emerged into generating some new and/or enriched approaches, translated into new and/or improved theoretical frameworks able to embrace national competitiveness. After emphasizing two of these, the paper stops at the most well known (and recent) global report on competitiveness and analyzes it - with some special insights for Romania, in order to identify some of the characteristics of the Romanian competitiveness facing the demands of globalization.

The new keynesian approach to dynamic general equilibrium modeling: models, methods, and macroeconomic policy evaluation

This chapter aims to provide a hands-on approach to New Keynesian models and their uses for macroeconomic policy analysis. It starts by reviewing the origins of the New Keynesian approach, the key model ingredients and representative models. Building blocks of current-generation dynamic stochastic general equilibrium (DSGE) models are discussed in detail. These models address the famous Lucas critique by deriving behavioral equations systematically from the optimizing and forward-looking decision-making of households and firms subject to well-defined constraints. State-of-the-art methods for solving and estimating such models are reviewed and presented in examples. The chapter goes beyond the mere presentation of the most popular benchmark model by providing a framework for model comparison along with a database that includes a wide variety of macroeconomic models. Thus, it offers a convenient approach for comparing new models to available benchmarks and for investigating whether particular policy recommendations are robust to model uncertainty. Such robustness analysis is illustrated by evaluating the performance of simple monetary policy rules across a range of recently-estimated models including some with financial market imperfections and by reviewing recent comparative findings regarding the magnitude of government spending multipliers. The chapter concludes with a discussion of important objectives for on-going and future research using the New Keynesian framework

The Determinants of National Innovative Capacity

Motivated by differences in R&D productivity across advanced economies, this paper presents an empirical examination of the determinants of country-level production of international patents. We introduce a novel framework based on the concept of national innovative capacity. National innovative capacity is the ability of a country to produce and commercialize a flow of innovative technology over the long term. National innovative capacity depends on the strength of a nation's common innovation infrastructure (cross-cutting factors which contribute broadly to innovativeness throughout the economy), the environment for innovation in its leading industrial clusters, and the strength of linkages between these two areas. We use this framework to guide our empirical exploration into the determinants of country-level R&D productivity, specifically examining the relationship between international patenting (patenting by foreign countries in the United States) and variables associated with the national innovative capacity framework. While acknowledging important measurement issues arising from the use of patent data, we provide evidence for several findings. First, the production function for international patents is surprisingly well-characterized by a small but relatively nuanced set of observable factors, including R&D manpower and spending, aggregate policy choices such as the extent of IP protection and openness to international trade, and the share of research performed by the academic sector and funded by the private sector. As well, international patenting productivity depends on each individual country's knowledge stock.' Further, the predicted level of national innovative capacity has an important impact on more downstream commercialization and diffusion activities (such as achieving a high market share of high-technology export markets). Finally, there has been convergence among OECD countries in terms of the estimated level of innovative capacity over the past quarter century.

Considering Law and Macroeconomics

The worst financial and economic crisis to hit the world’s richest economies since the Great Depression inspired a flood of scholarship that straddled the disciplines of law and macroeconomics. With few exceptions, this crisis scholarship did not set out to build a new interdisciplinary movement and did not claim the legacy of earlier efforts to mine the intersection of law and macroeconomics. What are we to make of this moment ten years on? Could Law and Macroeconomics (#LawMacro for short) be an important new turn in legal and economic thought, a casual interdisciplinary tryst on the margins of a hundred-year flood, or, paraphrasing one commentator, this generation’s Freudian pushback against the venerable Law and Economics movement? This symposium issue of Law and Contemporary Problems offers a sampling of views from a September 2019 conference at Georgetown Law on the prospects for LawMacro as a field of inquiry. Our principal goal for the Conference and this Issue has been to consider the scope for more systematic, sustained engagement between law and macroeconomics, distilling post-crisis research trends, and identifying avenues for future collaboration

Technological innovation, institutions and human purposefulness in socioeconomic evolution: A preface to Christopher Freeman "Systems of Innovation. Selected Essays in Evolutionary Economics"

Christopher Freeman; National Systems of Innovation; Techno-economic paradigms; Variety of capitalisms; Political economics; Evolutionary Economics