The Role of Employment Protection During An Exogenous Shock To An Economy

This paper explores the role of employment protection when powerful external crises reduce demand for products. We first present a theoretical framework that shows that employment protection has a U-shaped effect on abnormal unemployment during a negative exogenous shock to an economy. Using data from the 33 OECD countries, we analyze how the level of employment protection affected the stability of unemployment rates during the recent global economic crisis. The results suggest that countries with an intermediate level of employment protection will have more stable unemployment rates during a world crisis. The policy implication of our paper is that countries should seek a medium level of employment protection that may act as an automatic stabilizer of the economy on the macro level.

Zavajajoče dojemanje in gospodarska učinkovitost regionalnega sistema

Novost, ki jo prinaša ta članek, je uporaba učinka napačnega dojemanja na modelu središče-obrobje. Na podlagi teoretičnega modela bomo pokazali, da na prostem trgu ob uvedbi učinka napačnega dojemanja v model pride do napačne porazdelitve podjetij med središčem in obrobjem. Anketa z vprašalnikom je potrdila, da obstaja napačno dojemanje kakovosti proizvodnih dejavnikov, in sicer v korist središča. To napačno dojemanje lahko najdemo tako v pogledih središča na obrobje kot v pogledih obrobja nase. Za spremembo teh napačnih dojemanj bi se moralo obrobje bolj tržiti, obenem pa tudi krepiti svojo vlogo in svoj položaj v državi

Practical Modified Gini Index. ACES Working Papers, 2012

The Gini index is the most common method for estimating the level of income inequality in countries. In this paper we suggest a simple modification that takes into account the moderating effect of in-kind government benefits. Unlike other studies that use micro level data that is rarely available for many countries or over a period of time, the proposed modified Gini index could be calculated using just the regularly available data for each country. Such data includes the original Gini coefficient, government consumption expenditures, GDP and total tax revenue as a percentage of GDP. This modified version of the Gini index allows us to calculate the level of inequality more precisely, and make better comparisons between countries and over time

Misleading perceptions and economic efficiency in a regional system

This paper’s innovation is the introduction of a misperception effect to the core-periphery model. Using a theoretical model, we show that the free market will lead to distorted spatial distribution of firms between the core and the periphery when a misperception effect is introduced into the model. Based on a questionnaire, we found that a misperception regarding the quality of the production factor exists in favour of the core compared to the periphery. This misperception is found not only in the eyes of the core with regard to the periphery, but also in the periphery regarding itself. We suggest marketing and empowerment of the periphery as a policy tool to alter these misperceptions

The role of cultural attributes in inequality. ACES Working Paper No. 1, 2008

This paper used cross country data in order to identify the variables that determine the inequality and poverty within countries. The main result is that culture differences have a significant role in the explanation of inequality and poverty differences between countries. Other interesting results are that globalization above a certain level contributes to inequality and poverty, and that inequality and poverty have an inverse U relation in relation to literacy

Older workers' employment in dynamic technology changes

Discrimination against older workers and the higher barriers for entrance to the workforce that these workers face are well documented in the literature. This situation becomes even worse when technological changes take place. In this paper the different responses of younger and older workers to those technological changes were analyzed, and it was revealed that older workers can be severely harmed when such changes occur. It was found that providing a subsidy for older workers could aid in reducing the unemployment among older workers, together with increasing growth of the economy and decreasing the inequality of income distribution.Public policy Technological change Labor market Older workers

A global analysis of culture and imperfect competition in banking systems

The high concentration of the banking sector is a cross-border phenomenon that has a strong impact on local and global economies. The primary goal of this paper is to analyse the factors that affect concentration in banking systems around the world. The innovation of this paper is that it combines economic, 'economic environment' and cultural variables as explanatory factors in this analysis. Among other things, it was found that regulation in the banking system helps ensure that it remains competitive. It was also found that cultural dimensions, such as power distance, have an impact on the level of concentration in the banking industry.banking sector; concentration levels; culture; regulation; banks.

The Optimal Policy Combination of the Minimum Wage and the Earned Income Tax Credit

This paper evaluates the consequences of minimum wage (MW) and earned income tax credit (EITC) in a model with heterogeneous costs of investment in human capital. Our model studies the effects of a MW and an EITC on employment, productivity, and total output for two types of groups: those with a low cost of acquiring human capital and a long horizon of earnings (Type Ys); and those with a high cost of acquiring human capital and a short horizon of earnings (Type Os). We assume that Type Ys consider investing in human capital while Type Os have a certain predetermined level of human capital and do not consider changing it. Our model suggests that a government might consider imposing a MW exclusively for Type Y individuals and an EITC exclusively for Type O individuals. Some of the best effects of each policy would therefore be obtained and some of the worst consequences would be avoided.

The Role of Culture and Economic Variables in Wars and Coups

The increasing number of local and regional conflicts around the world in the past several decades has led us to investigate the causes of war and coups. We used economic, cultural and demographic differences as explanatory variables in elucidating the causes of coups and wars between countries. We found that as the culture in a country becomes more individualistic and less collectivistic, the number of coups declines. However, as the uncertainty avoidance increases, the probability of coups also increases. When the standard of living in a country high, the probability of coups is lower. In relation to wars, we found that as the cultural differences between countries are greater, the likelihood of war is higher, and that the probability of war is also higher when the size (economic and demographic) differences are greater.