A note on the decentralization of Pareto optima in economies with public projects and nonessential private goods

Welfare Economics;Public Goods

Hiring and firing costs, adverse selection and long-term unemployment

In this paper, we present a matching model with adverse selection that explains why flows into and out of unemployment are much lower in Europe compared to North America, while employment-to-employment flows are similar in the two continents. In the model,firms use discretion in terms of whom to fire and, thus, low quality workers are more likely to be dismissed than high quality workers. Moreover, as hiring and firing costs increase, firms find it more costly to hire a bad worker and, thus, they prefer to hire out of the pool of employed job seekers rather than out of the pool of the unemployed, who are more likely to turn out to be 'lemons'. We use microdata for Spain and the U.S. and find that the ratio of the job finding probability of the unemployed to the job finding probability of employed job seekers was smaller in Spain than in the U.S. Furthermore, using U.S. data, we find that the discrimination of the unemployed increased over the 1980's in those states that raised firing costs by introducing exceptions to the employment-at-will doctrine.Adverse selection, turnover costs, unemployment, worker flows, matching models, discrimination

Efficiency and separability in economies with a trade center

We discuss the endogenous selection of a costly allocation mechanism in a pure exchange economy. The allocation mechanism is modeled as an abstract trade center exhibiting setup costs, access costs and linear transaction costs. Exactly one trade center has to be selected. We define Pareto efficiency in this setting and decentralize decision making concerning consumption as well as the choice of a trade center through the concept of a separable valuation equilibrium. In this equilibrium concept trade centers are assigned individualized nonlinear prices.Efficiency;International Trade;Costs;Allocation;Separability;international economics

Effect of Sensory Feedback from the Proximal Upper Limb on Voluntary Isometric Finger Flexion and Extension in Hemiparetic Stroke Subjects

This study investigated the potential influence of proximal sensory feedback on voluntary distal motor activity in the paretic upper limb of hemiparetic stroke survivors and the potential effect of voluntary distal motor activity on proximal muscle activity. Ten stroke subjects and 10 neurologically intact control subjects performed maximum voluntary isometric flexion and extension, respectively, at the metacarpophalangeal (MCP) joints of the fingers in two static arm postures and under three conditions of electrical stimulation of the arm. The tasks were quantified in terms of maximum MCP torque [MCP flexion (MCPflex) or MCP extension (MCPext)] and activity of targeted (flexor digitorum superficialis or extensor digitorum communis) and nontargeted upper limb muscles. From a previous study on the MCP stretch reflex poststroke, we expected stroke subjects to exhibit a modulation of voluntary MCP torque production by arm posture and electrical stimulation and increased nontargeted muscle activity. Posture 1 (flexed elbow, neutral shoulder) led to greater MCPflex in stroke subjects than posture 2 (extended elbow, flexed shoulder). Electrical stimulation did not influence MCPflex or MCPext in either subject group. In stroke subjects, posture 1 led to greater nontargeted upper limb flexor activity during MCPflex and to greater elbow flexor and extensor activity during MCPext. Stroke subjects exhibited greater elbow flexor activity during MCPflex and greater elbow flexor and extensor activity during MCPext than control subjects. The results suggest that static arm posture can modulate voluntary distal motor activity and accompanying muscle activity in the paretic upper limb poststroke