Firing versus Continuing Employment if an Economic Setback is Expected

A simple model evaluating a firm’s optimal employment reaction to an imminent recession is presented. Firing costs shelter employment – and this effect is typically amplified by uncertainty due to an option value of waiting. However, this job protection effect is reduced if the expected probability of a setback increases, and if the expected duration and size of a recession grows. If a severe recession is expected with a high probability the option to wait with firing looses its value, thus, immediate layoffs and market exits become the optimal strategy even before the recession turns out to be actual.Firing costs and uncertainty; probability, duration and size of recession

A One-Sector Model with Learning-by-doing, Investment, Leisure, and Optimal Growth

A one-sector model of endogenous growth based on the accumulation of real capital by saving/investing and accumulation of human capital via learning-by-doing is presented. Experience is measured by means of production output aggregated over time. Explicitly separating learning and real capital accumulation allows for an independent control of the learning process via working time. Though based on a simple one-sector model, accumulation of both types of capital is endogenously determined and a simultaneous dynamic optimisation of leisure/working time and of consumption/saving is executed. Transitional dynamics are derived and numerical simulations performed.

Learning-by-doing in Two Sectors, Production Structure, Leisure and Optimal Endogenous Growth

A model with two different production sectors and endogenous growth based on the accumulation of sector-specific human capital due to learning-by-doing is presented. Accumulation of experience is measured by means of sectoral production output aggregated over time. Growth is controlled by a dynamic optimisation of the use of time for working in the different sectors or for leisure. Transitional dynamics of production growth, especially of structural change towards a 'new' sector (with relatively scarce experience), of the optimal sectoral distribution of working time and of leisure as well as the corresponding steady state levels are derived and a numerical simulation is performed.

The Many Problems of Special Divine Action

Special divine action is an integral part of the Christian worldview. In fact, the plausibility of the Christian worldview depends on and is grounded in the putative reality, and therefore possibility, of special divine action. Without special divine action, Scripture does not make sense, and without Scripture, Christianity neither. However, the possibility of special divine action is highly contested in almost every field of human enquiry. In what follows, I briefly suggest a minimal definition of special divine action and show its indispensability for the internal plausibility of Christian faith. I then argue against the very possibility of special divine action. I end by way of identifying ways in which Christian theologians can respond to the arguments in order to justify the possibility of special divine action. It turns out that special divine action neither contradicts science nor metaphysics

Layoffs in a Recession and Temporary Employment Subsidies when a Recovery is ExpectedLayoffs in a Recession and Temporary Employment Subsidies when a Recovery is Expected

Sunk firing costs shelter employment – and this effect is typically amplified by uncertainty due to an option value of waiting. Thus, if sunk firing costs are high, e.g. due to a employment protection legislation, and if recession related losses are with a high probability expected to be only transitory and not permanent, a relatively small employment subsidy will be sufficient to avoid layoffs by firms operating with current losses. Depending on the size of sunk hiring costs cyclical layoffs or even permanent job destruction can be avoided by short run subsidies during the beginning of a recession.recession; employment; sunk firing costs; uncertainty; employment subsidy

An Analytic Theologian's Stance on the Existence of God

The existence of God is once again the focus of vivid philosophical discussion. From the point of view of analytic theology, however, people often talk past each other when they debate about the putative existence or nonexistence of God. In the worst case, for instance, atheists deny the existence of a God, which no theists ever claimed to exist. In order to avoid confusions like this we need to be clear about the function of the term 'God' in its different contexts of use. In what follows, I distinguish between the functions of 'God' in philosophical contexts on the one hand and in theological contexts on the other in order to provide a schema, which helps to avoid confusion in the debate on the existence or non-existence of God

Efficiency Wages and Negotiated Profit-Sharing under Uncertainty

Efficiency wage effects of profit sharing are combined with option values related to stochastic future profit variations. These option effects occur if the workers’ profit share is fixed by long-term contracts. The Pareto-improving optimal level of the sharing ratio is calculated for two different scenarios. First, if the firm can unilaterally decide, the expected present value of net profits is maximised. Second, if the sharing ratio is based on bilateral Nash bargaining. Since a larger variation of revenues implies a higher redistribution of future profits, the inclusion of expected variations results in a lower worker’s profit ratio in both scenarios.

Play-hysteresis in supply as part of a market model

Consequences of path-dependent supply side on the market equilibrium are illustrated. Supply is only a subsystem of the entire market with its forcing variable (price) being endogenous from the perspective of the entire market. This results in feedbacks on the equilibrium of price and quantity if transient exogenous disturbances occur. Aggregate hysteresis is modelled by continuous dynamics showing similarities to ‘mechanical play’. This contrast the standard firm level modelling of hysteresis resulting from discontinuous (activity/inactivity) switches. Play dynamics are captured in a simple linearized way, just by adding two parameters to a supply equation