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1 – 10 of over 15000The aim of this article is to explore the current European debate over labour market flexibility. First, it considers lessons from economic theory. The classical consensus…
Abstract
The aim of this article is to explore the current European debate over labour market flexibility. First, it considers lessons from economic theory. The classical consensus considering unemployment to be purely voluntary, the Keynesian consensus introducing the concept of demand deficient involuntary unemployment and finally the neo‐classical consensus returning us to the classical viewpoint of the dominance of real conditions in the labour market. In order to proceed without confusion the article provides a clear working definition of the natural rate of unemployment and its three main components, voluntary unemployment, structural unemployment and involuntary unemployment. It then proceed to analyse each of these main components in detail, illustrating the difference between a free market approach and a European Commission approach to reducing each component of unemployment. The article concludes that the future is dependent on all EU citizens as electors of governments and holders of wages to moderate.
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David Weitzner and James Darroch
This paper aims to explore the linkages between greed and governance failures in both financial institutions and financial markets.
Abstract
Purpose
This paper aims to explore the linkages between greed and governance failures in both financial institutions and financial markets.
Design/methodology/approach
The paper described how innovation changed the US financial system through an analysis of recent events, and employs the philosophic concepts of hubris and greed to explain certain developments.
Findings
The development of the shadow banking system and opaque products was motivated in part by greed. These developments made governance at both the institutional and market levels extremely difficult, if not impossible. In part the findings are limited by the current opacity of the markets and the dynamics of events.
Practical implications
The implication of the research is to reinforce the need for transparency if the risk of innovation in the financial system is to be both identified and managed. The creation of central clearing houses and/or exchanges for new products is clearly indicated.
Originality/value
Understanding the linkages between greed, hubris and governance in the development of opaque products provides insights of value to those trying to understand the current crisis – from academics to practitioners.
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The precise relationships between neoliberalization, financialization, and rising risk are still being debated in the literature. This paper examines, and challenges, the…
Abstract
The precise relationships between neoliberalization, financialization, and rising risk are still being debated in the literature. This paper examines, and challenges, the Financial Instability Hypothesis (FIH) developed by Hyman Minsky and his adherents. In this perspective, the level of financial risk builds over time as participants orient their behavior in relation to assessments of past levels of risk performance, leading them to overly optimistic valuation estimates and increasingly risky behavior with each subsequent cycle. However, there are problems with this approach, and many questions remain, including how participants modify their exposure to risk over time, how risk is scaled, and who benefits from changes in exposure to risk. This paper examines such questions and proposes an alternate perspective on financial instability and risk, in light of the history of risk management within Canada’s housing finance sector. The rise of financialization in Canada has been accompanied by shifts in the sectoral and scalar locus of risk within the housing sector, from the federal state, to lower levels of government, third-sector organizations, and finally, private households. In each case, the transfer of risk has occurred as participants in each stage sought to reduce their own risk exposure in light of realistic and even pessimistic (not optimistic) expectations deriving from past exposure, contradicting basic assumptions of Minsky’s FIH. This is the process that has driven the neoliberalization of housing finance in Canada, characterized by the socialization of lender risk while households increasingly take on the financial and social risks relating to shelter.
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Juan J. Dolado, Florentino Felgueroso and Juan F. Jimeno
This paper aims to review the experience so far of the Spanish labour market during the Covid-19 crisis in the light of the existing institutions, its performance during past…
Abstract
Purpose
This paper aims to review the experience so far of the Spanish labour market during the Covid-19 crisis in the light of the existing institutions, its performance during past recessions and the policy measures adopted during the pandemic. Emphasis is placed on the role of worldwide trends in labour markets because of automation and artificial intelligence, in shaping a potential recovery of this (hopefully) transitory shock through a big reallocation process of employment and economic activity. It also highlights some innovations to employment and social policies needed to smooth the reallocation process and lessen the rise in inequality associated to technological trends.
Design/methodology/approach
Theory and empirics.
Findings
The Spanish labour market will subject to a great reallocation shock as a result of Covid-19 and secular technological changes. Reforms need to be undertaken.
Originality/value
An overview and some new results.
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Peter J. Boettke and Liya Palagashvili
During times of economic crises, the public policy response is to abandon basic economic thinking and engage in “emergency economic” policies. We explore how the current financial…
Abstract
During times of economic crises, the public policy response is to abandon basic economic thinking and engage in “emergency economic” policies. We explore how the current financial crisis was in part caused by previous emergency economic measures. We then investigate the theoretical limitations of emergency economic responses. We argue that these responses fail to take into consideration the practical conditions of politics, thereby making them unsuitable to remedy the problems of a crisis. Lastly, we provide a preliminary analysis of the consequences resulting from emergency economic policies initiated in response to the 2008 financial crisis.
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Tiziana Assenza, Michele Berardi and Domenico Delli Gatti
Should the central bank target asset price inflation? In their 1999 paper Bernanke and Gertler claimed that price stability and financial stability are “mutually consistent…
Abstract
Should the central bank target asset price inflation? In their 1999 paper Bernanke and Gertler claimed that price stability and financial stability are “mutually consistent objectives” in a flexible inflation targeting regime which “dictates that central banks … should not respond to changes in asset prices.” This conclusion is straightforward within their framework in which asset price inflation shows up as a factor “augmenting” the IS curve. In this chapter, we pursue a different modeling strategy so that, in the end, asset price dynamics will be incorporated into the NK Phillips curve. We put ourselves, therefore, in the best position to obtain a significant stabilizing role for asset price targeting. It turns out, however, that inflation volatility is higher in the asset price targeting case. After all, therefore, targeting asset prices may not be a good idea.
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