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1 – 10 of over 2000Firouz Fallahi, Hamed Pourtaghi and Gabriel Rodríguez
The paper aims to study the effect of the unemployment rate and its volatility on crime in the USA. It proposes that not only the unemployment rate, but also its volatility affect…
Abstract
Purpose
The paper aims to study the effect of the unemployment rate and its volatility on crime in the USA. It proposes that not only the unemployment rate, but also its volatility affect the crime.
Design/methodology/approach
First, the volatility of the unemployment rate is calculated using ARCH models. Next, using the results from the first stage the ARDL approach to cointegration is used to examine the link between the unemployment rate and its volatility on the crime.
Findings
The cointegrated or long‐run relationships are found only for burglary and motor‐vehicle theft. The results indicate that the unemployment rate has a significant effect on burglary and motor‐vehicle theft only in the short run and the unemployment volatility has a negative effect on motor‐vehicle theft regardless of time span. However, it has a positive effect on burglary in the short run and no effect in the long run.
Originality/value
The effect of unemployment rate on crime is documented in the literature. However, to the best of our knowledge, this is the first paper that emphasizes the importance of unemployment rate volatility on the crime.
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Marek Antosiewicz and Piotr Lewandowski
The purpose of this paper is to identify factors behind cyclical fluctuations and differences in adjustments to shocks in Greece, Italy, Portugal and Spain (GIPS) and a reference…
Abstract
Purpose
The purpose of this paper is to identify factors behind cyclical fluctuations and differences in adjustments to shocks in Greece, Italy, Portugal and Spain (GIPS) and a reference country – Germany. The authors try to answer the question whether the GIPS countries could have fared differently in the Great Recession if they reacted to shocks affecting them like a resilient German economy would have.
Design/methodology/approach
The authors use a DSGE model of real open economy with search and matching on the labour market and endogenous job destruction, estimated separately for each country. The authors calculate impulse response functions, historical decompositions and perform counterfactual simulations of the response of the German model to the sequence of shocks identified for each of GIPS.
Findings
The authors find that all GIPS countries were more vulnerable to productivity and foreign demand shocks than Germany. They would have experienced lower macroeconomic volatility if they reacted to their shocks like Germany. Employment (unemployment) rates in GIPS would have been less volatile and higher (lower) during the Great Recession, especially in Spain and Greece. Real wage volatility would have been higher, especially in Spain and Portugal.
Originality/value
The trade-off between unemployment and wage adjustments vis-à-vis Germany was the largest in Spain, which also would have experienced lower variability of job separations and hirings. The evolution of the labour market in Greece and Portugal was driven rather by its higher responsiveness to GDP fluctuations than in Germany, whereas Italy emerges as the least responsive labour market within GIPS.
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Helder Ferreira de Mendonça and José Simão Filho
The purpose of this paper is to study if the central bank (BC) communications affect the effectiveness of the monetary policy.
Abstract
Purpose
The purpose of this paper is to study if the central bank (BC) communications affect the effectiveness of the monetary policy.
Design/methodology/approach
For this analysis, a new Keynesian theoretical model and the ordinary least squared methodology were used. The objective to be achieved was to determine if there is some effect of economic transparency on accountability, inflation average, output gap, interest and central bank credibility.
Findings
The results highlighted that central banks with greater transparency contribute to decrease inflation rate and interest rate. The findings denote that an increase in the information quality (clarity) implies a significant change in the rate of readjustment of market expectations. Furthermore, central bank transparency contributes to anchor the public expectations and to affect long‐run interest rates.
Research limitations/implications
Impulse‐answer research was employed to show how the central bank transparency affects the credibility of monetary authorities.
Practical implications
This paper suggests that the central bank publicizes its outlook, its policy monetary decisions, its expectations and its preferences.
Originality/value
The originality of the paper resides in the fact that empirical and theoretical studies were made in the single work. Also, new results were found denoting that economic transparency reduces uncertainty effect and increases the power of incentive contract made between the BC and public.
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The purpose of this paper is to investigate the association between unemployment insurance (UI) benefits and firms’ future performance as well as the association between UI…
Abstract
Purpose
The purpose of this paper is to investigate the association between unemployment insurance (UI) benefits and firms’ future performance as well as the association between UI benefits and volatility of firms’ future performance.
Design/methodology/approach
Quantitative analyses are used to perform empirical testing, and the variables in this study have been selected from previous literature. Empirical data consists of UI benefits data published from 2003 to 2012 on the US Department of Labor website, accounting data from Compustat, and stock return data from CRSP.
Findings
Unemployment benefits are positively associated with firms’ future earnings and cash flows. Also, unemployment benefits are negatively associated with volatility of firms’ future earnings and cash flows. Finally, the positive association between unemployment benefits and firms’ future performance is more pronounced for firms with larger changes in labor force, and the negative association between unemployment benefits and volatility of firms’ future performance is more pronounced for firms with higher labor force volatility and capital structure volatility.
Research limitations/implications
To the extent that other correlated omitted variables exist, the readers are asked to interpret the findings in this paper with caution.
Originality/value
This study contributes to prior literature on labor economics, finance, and accounting. The findings may be of interest to academic researchers and policy makers.
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Anastasios G. Malliaris and Ramaprasad Bhar
The equity premium of the S&P 500 index is explained in this paper by several variables that can be grouped into fundamental, behavioral, and macroeconomic factors. We hypothesize…
Abstract
The equity premium of the S&P 500 index is explained in this paper by several variables that can be grouped into fundamental, behavioral, and macroeconomic factors. We hypothesize that the statistical significance of these variables changes across economic regimes. The three regimes we consider are the low‐volatility, medium‐volatility, and high‐volatility regimes in contrast to previous studies that do not differentiate across economic regimes. By using the three‐state Markov switching regime econometric methodology, we confirm that the statistical significance of the independent variables representing fundamentals, macroeconomic conditions, and a behavioral variable changes across economic regimes. Our findings offer an improved understanding of what moves the equity premium across economic regimes than what we can learn from single‐equation estimation. Our results also confirm the significance of momentum as a behavioral variable across all economic regimes
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The purpose of this paper is to examine the housing price volatility for eight capital cities in Australia over 1987‐2007. Specifically, the volatility of Australian housing and…
Abstract
Purpose
The purpose of this paper is to examine the housing price volatility for eight capital cities in Australia over 1987‐2007. Specifically, the volatility of Australian housing and its determinants were investigated.
Design/methodology/approach
An exponential‐generalised autoregressive conditional heteoskedasticity (EGARCH) model was employed to analyse the volatility for eight capital cities in Australia. The Engle LM test was also utilised to examine the volatility clustering effects in these cities.
Findings
The volatility clustering effects (ARCH effects) were found in many Australian capital cities. The importance of estimating each individual city's EGARCH model was also demonstrated in which the determinants of housing volatility vary from a city to another city. Asymmetric of the positive and negative shocks were also documented.
Research limitations/implications
This study has implications for investors and policy makers in which housing investors should estimate the conditional variance (EGARCH process) of a housing market in respect to the volatility of housing series is not always constant over time. Furthermore, policy makers should also address the importance of considering the sub‐national factors in formulating the national housing policy. The analysis and results are limited by the quality of the data.
Originality/value
This paper is one of the few studies in housing volatility. Additionally, it is probably the first attempt to assess the volatility spillover effects in the Australian housing market.
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The purpose of this paper is to introduce productivity-dependent firing costs into an otherwise standard endogenous separations matching model. The authors suggest an alternative…
Abstract
Purpose
The purpose of this paper is to introduce productivity-dependent firing costs into an otherwise standard endogenous separations matching model. The authors suggest an alternative to the standard fix cost approach and account for empirical evidence emphasizing that firing costs vary across workers. The authors show that the model with firing costs outperformes the model without firing costs and replicates the empirical facts fairly well. Furthermore, the authors present cross-country evidence that countries with stricter employment protection have a weaker Beveridge curve relation and surprisingly more volatile job flow rates.
Design/methodology/approach
The authors begin the analysis at the intersection of labor and product markets. For this purpose, the authors derive a real business cycle model with search and matching frictions and endogenous separations. The authors enrich this set-up by introducing productivity-dependent firing costs.
Findings
The authors show that the model with firing costs outperformes the model without firing costs and replicates the empirical facts fairly well. Furthermore, the authors present cross-country evidence that countries with stricter employment protection have a weaker Beveridge curve relation and surprisingly more volatile job flow rates.
Originality/value
This paper introduces productivity-dependent firing costs into an otherwise standard endogenous separations matching model. The authors suggest an alternative to the standard fix cost approach and account for empirical evidence emphasizing that firing costs vary across workers. The authors show that the model with firing costs outperformes the model without firing costs and replicates the empirical facts fairly well. Furthermore, the authors present cross-country evidence that countries with stricter employment protection have a weaker Beveridge curve relation and surprisingly more volatile job flow rates.
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This paper reviews economic studies on the effects of various aspects of finance on labour market outcomes.
Abstract
Purpose
This paper reviews economic studies on the effects of various aspects of finance on labour market outcomes.
Design/methodology/approach
The paper is a systematic literature review that reviews the weight of the evidence on the relationships between specific elements of finance and labour outcomes. The review is divided into three major sections: (1) job quantity and job quality; (2) distributional effects; and (3) resilience and adaptability.
Findings
Finance interacts with labour market institutions to jointly determine labour outcomes. Firm financial structures influence their labour practices – highly leveraged firms show greater employment volatility during cyclical fluctuations, and leverage strengthens firm bargaining power in labour negotiations. Bank deregulation has mixed impacts on labour depending upon the state of prior bank regulations and labour markets. Leveraged buyouts tend to dampen acquired-firm job growth as they pursue labour productivity gains. The shareholder value movement may contribute to short-termism among corporate managers, which can divert funds away from firm capital accumulation toward financial markets, and crowd out productive investment. Declining wage shares of national income in most OECD countries since 1990 may be driven in part by financial globalisation. The financial sector contributes to rising income concentration near the top of the distribution in developed countries. The availability of finance is associated with increased reallocation of labour, which may either enhance or impede productivity growth. Finally, rising interest rate environments and homeowners with mortgage balances that exceed their home's value may reduce labour mobility rates.
Originality/value
This review contributes to the understanding of the effects of finance on labour by reviewing and synthesising a large volume of literature.
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