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Studies of the demand for tourism, the results of which have appeared in economics journals, are still few in number. The reasons for this are twofold: the special nature of tourism demand and the lack of adequate data.
There are several reasons why tourism represents an unusual form of demand (see Schulmeister, 1979). First, it is a demand for a 'bundle' of goods and services: as such, no production sector 'tourism' actually exists, which casts doubt for some on the existence of tourism as a concrete economic entity. Second, as tourism is conventionally defined (United Nations, 1978), demand for it is of two types: tourism as private consumption (demand of private households) and tourism as part of production (business trips). These components could be subject to different influences and/or the same influences but to differing degrees, yet very often it is impossible to examine each component in isolation. Third, tourism goods and services are not transported to their users, but rather the consumers are transported to the goods and services. As a result, transport costs and facilities assume an importance for tourism which far exceeds that for merchandise trade and, also, tourist flows are far more susceptible to noneconomic influences such as political instability, sporting events and other special influences.
The purpose of this paper is to extend this work: first, by analysing by means of a system of demand equations the share of each European country in total US tourist expenditure in Europe between 1964 and 1981 and, second, by formalizing the link with economic theory more fully than was done in previous studies. Market shares of US tourist expenditure in Europe. [ABSTRACT FROM AUTHOR]

It is the aim of the present paper to contribute to this process by reproducing Barro--Pesaran experiment with data from four western European economies: France, Germany, Italy and Spain. Such a study, it is hoped, will determine the extent to which the conclusions reached by the above authors may be confirmed for countries whose political and economic environments differ from those present in the US and the UK.
The choice of the countries in our sample was motivated by the following three factors. (1) The bulk of extant empirical work pertains to US and occasionally to UK data [Barro (1977, 1978) and Pesaran (1982a) use US data while Attfield et al. (1981) estimate a quarterly model for the UK fashioned after Barro's model]. (2) The size of these four countries and the importance to their economies of international trade provide the opportunity to test the contending models in the ease of small open economies. (3) The countries retain the basic complexion of a decentralized capitalist economy. Extension of this research to other countries with different economic and political environment would be desirable.
Before presenting our empirical results, their place within the broader controversy of New Classical vs Keynesian has to be highlighted. Accordingly, the rest of the paper is organized as follows. Section II contains a general survey of the issues separating New Classicals from Keynesians. In Section III, the model and the procedures to be followed in our empirical work are laid out, and the relevant empirical findings for the US economy are, briefly, surveyed. Section IV presents our empirical results, and Section V contains the conclusions of the study. [ABSTRACT FROM AUTHOR]

Since the depression in 1975, the world steel industry has been suffering from a serious problem of excess production capacity in terms of both physical capital and manpower. As a consequence there has been a growing recourse, by all countries, to trade restrictionist measures in order to protect their domestic industries from outside competition. The European Economic Community (EEC) has been no exception in this sequence of events as witnessed by the amazing number of trade barriers introduced by member states or by the Community authorities during the past decade.
Although the introduction of such barriers provides an ex-post proof of the existence of a highly price-elastic European import demand for steel products, there exists no recent empirical study which has tried to measure the magnitude of this elasticity. This paper is an attempt in that direction. It develops and estimates an import demand function for iron and steel products from third-party countries to the EEC as a whole.[1] The reason for choosing the EEC as a whole, rather than each member state, lies basically in the absence of reliable price data for individual countries.
The paper is divided into four sections. Section II is dedicated to an overview of the recent empirical literature on the same subject. In Section III a new model for imports of iron and steel products into the EEC is developed. A summary and concluding remarks are contained in Section IV, whilst an Appendix to the paper derives the explicit expression for the price variable which appears in the estimated equation. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to evaluate ECR's hedging performance and to consider the implications of the findings for corporate management of foreign exchange risk. Specifically, this study is aimed to determine if the ECR advisory service possesses 'expertise'. In a way, the evidence on the performance of ECR is clearly related to the efficient market theory. Concentration on ECR's performance is unique in comparison to Goodman (1979) and Levich (1980) studies in the sense that this study evaluates a specific hedging recommendation rather than a prediction of the future spot rate. Finally, it is hoped that on the basis of additional empirical evidence on the subject of foreign exchange advisory services some conclusions can be drawn about the usefulness of these forecasts. [ABSTRACT FROM AUTHOR]

The objectives of this paper are to test the relative version of the law of one price in the short and the long run at various levels of aggregation for traded goods. The use of an error-correction model is made to test the validity of the hypothesis in the short run with a built-in tendency to one price in the long run. Using unit value trade data at the aggregate, 2-digit and 3-digit levels of the Standard International Trade Classification, the law of one price is generally rejected in the short run, although a long-run proportional relationship between prices is often found. An intriguing feature of the results is that when data on the prices of fairly homogeneous products are used the hypothesis is rejected both in the short and long run. This suggests that non-price changes which are likely to be incorporated in unit values are probably gradual and affect EEC countries in a similar manner. Price changes, however, are somewhat erratic and hence with unit-value data, the law of one price in the long run is not contradicted, while it is refuted at the desegregated level when price data are used. [ABSTRACT FROM AUTHOR]

The relationship between unemployment and health status is examined in a comparative study of five European countries using a time series model. "The hypothesis considered in this paper is that the secular decline in mortality rates can be attributed to the secular rise in real per capita income and that the remaining fluctuations in mortality rates can be explained by cyclical movements in income and variations in unemployment." The data concern the Federal Republic of Germany, France, Italy, Sweden, and Ireland., (excerpt)

In this paper we examine the relationship between consumers' opinions as proxied by a survey-based confidence index and measurable economic variables in four major EC countries. We are particularly interested in the impact of foreign factors, such as the price of oil and the exchange rate. Several studies have attempted to assess the usefulness of the information contained in consumer surveys. Studies by Hymans (1970), Fair (1971), Shapiro (1972), McNeil (1974)for the US and by Vanden Abeele (1983) for the main EC countries have concluded that indexes of consumer sentiment do not contain much useful information since they can be explained by a small number of economic variables. [ABSTRACT FROM AUTHOR]

This paper demonstrates that the relative price of health care could be used to explain the conflicting results of the empirical studies which attempt to measure the income elasticity of demand. Our empirical results, based on a conventional model and cross-national data set for the EC, show that whereas health care may be labelled as a luxury good, the large income effect can be interpreted as merely offsetting the price effect. [ABSTRACT FROM AUTHOR]

In post-1992 Europe, capital will tend to flow to areas of lowest unit output cost. Differences in the quality of labour-management relations, here proxied by strike activity, could be an important component of such costs. The performance of strike models for EC member states is examined, paying particular attention to the evidence for reaction equality to macroeconomic stimuli and for the existence of 'strike waves'. Both hypotheses are rejected, meaning, firstly, that there is no justification for data-pooling but, secondly, that member states are free to pursue policies to improve their industrial relations environments without fear that they will be undermined by developments elsewhere.
This paper, therefore, provides an initial analysis of inter-EC strike patterns, beginning, in Section II, with a brief presentation of the stylized facts. Section III then evaluates the performance of certain aggregate strike models which have recently found favour in the literature, in an EC context. This is followed, in Section IV, by an investigation of two important questions. The first seeking to establish whether the responses of EC strike patterns to macro-stimuli are equal across members and the second aiming to identify whether there are omitted common influences from the strike models which could indicate the existence of strike-waves. Finally, Section V summarizes and concludes the work. [ABSTRACT FROM AUTHOR]

The paper investigates the sources of the observed price disparities in the EEC automobile market. On the basis of an oligopoly model with product differentiation, this paper tests, and fails to reject, the hypothesis that automobile firms segregate national markets in the EEC. It is found that value added tax differentials and the existence of different import restraints (quotas and VERs) are important contributing factors to price disparities. On the contrary, transportation cost differentials are not a significant explanatory variable. Finally, the preference for domestic products or 'national' brands is found as an important contributing factor in Britain and Italy. [ABSTRACT FROM AUTHOR]

This paper aims at investigating the behavior of risk premia of currencies participating in the European Monetary System (EMS) against the dollar. For this purpose a multivariate GARCH-in-mean model is specified, allowing the risk premia of EMS currencies other than the deutschmark to be determined as a function of their conditional covariance with the deutschmark/dollar exchange rate. The risk premium of the latter is determined by its own conditional variance. The model is able to capture the time-varying character of the relationship between EMS currencies and the deutschmark. Furthermore, the model allows us to examine how changes in the conditional variances and covariances of future exchange rates affect the level of current exchange rates. [ABSTRACT FROM AUTHOR]

It is a peculiar feature of European banking markets that, in almost every country, a handful of large banks tend to emerge over time, whether through government encouragement, or the workings of the market mechanism. From a general perspective, however, it is difficult to evaluate the competitive implications of increased concentration. The traditional structure-conduct-performance (SCP) paradigm would suggest that increased concentration fosters collusion and anti-competitive practices whereas the efficiency hypothesis suggests otherwise. This paper presents tests of the two hypotheses with respect to the European banking industry using pooled and annual data for the period 1986 to 1989. The results generally support the traditional SCP paradigm as an explanation for the market behaviour of European banks. [ABSTRACT FROM AUTHOR]

This paper assesses the extent and sources of the UK's comparative advantage within the European Union (EU). It finds that both inter-industry and intra-industry trade are important despite clear aggregation effects. Having established that there is a significant degree of inter-industry specialization the sources of this are analysed, using a factor-content approach. Results are reported for aggregate factors of production and, in the case of labour, by disaggregated skill categories. A key finding is that the UK's net trade with the EU is driven more by a specialization in specific types of skill than by an overall endowment of human capital. The results also suggest that the inter-industry specialization cannot be explained by comparative advantage alone. [ABSTRACT FROM AUTHOR]

The article uses the input-distance function for estimating, within the framework of a fixed-effects panel data, the cost of allocative inefficiency in multiproduct public railways. The procedure used is the same as that used to estimate cost-function shares. The distance-function approach, however, allows an immediate estimation of the cost of an inefficient usage of each input, whereas the cost-function approach requires a two-step procedure: one can first estimate excess input usage and then compute the overall cost of that excess usage. This gives to the distance function another advantage over the cost function. The procedure was applied to the estimation of allocative (input price) efficiency of four European railway systems. Comparative analysis has revealed the level of excess input expenditure and its variation over time. Contrary to commonly held views, the evidence shows that the extent of the deviation from an allocatively efficient behavior by public railway systems can be very high.

This article examines how a new market signal of inflation expectation could be used to inform the policy-maker when interest rates could be lowered without triggering inflation. Methodologies have been developed aimed at measuring the gilts (inflation-indexed government bonds) market's forecast of the future inflation path. A gilts market window on expectation can be used as a diagnostic tool both to examine why a macroeconomic model forecasts badly, and also to detect the extent to which an external shock has shifted market expectation away from its equilibrium path. It is only via changes in perception that the behaviour of economic agents and therefore the future can be influenced towards the policy target. The estimates suggest that it is technically possible with the indexed gilts method to read the financial markets forecast of the future inflation path in Great Britain. The expected inflation path alters in response to external shocks and to subsequent policy reaction, and these movements in market expectation can be monitored as they occur. In principle, the gilts market can provide "on-line" instantaneous information on movements in expected future inflation in response to external events, news, political speeches and most important, in response to proposed policy reactions to events even before they are implemented.

This paper is concerned with the definition and measurement of efficiency in a public body, specifically railways. The authors argue against commonly used measures such as profit and labour productivity in favour of a production possibility frontier approach. Physical measures of input and output are derived and applied using a variety of methodologies. Results from some of the most popular, such as Data Envelopment Analysis and Corrected Ordinary Least Squares using the Translog function, are shown to be potentially misleading. Two original approaches, one using Uniform efficiency distributions and the other applying Bayesian State Space techniques, are developed and applied but these too are found to be potentially unreliable. Comparison with results from other authors finally lead to the conclusion that accurate measurement of efficiency is not possible, although the research is able to indicate good and bad performers. The final conclusion is that efficiency on the railway is a product primarily of good management. [ABSTRACT FROM AUTHOR]

In past research on the long-run behaviour of exchange rates the possibility of cointegration among spot rates has been rejected. This rejection is surprising as some exchange rates are bound by official agreements to comove over time. The European Monetary System (EMS) is an example of such an officially coordinating system. In this paper we extend past research by focusing on only EMS rates and use potentially more powerful cointegration tests to show that EMS rates are cointegrated. [ABSTRACT FROM AUTHOR]

This paper proposes a method to estimate separately the size of the expected depreciation in an eventual devaluation of the central parity in the ERM, and the probability assigned by agents to this devaluation occurring in the short run. The proposed method complements the information provided by the jumps observed in market exchange rates around realignments with the information contained in interest rate differentials on the future behaviour of exchange rates. The separation of probability and size allows a richer analysis of the effects of devaluations on exchange rate credibility in the ERM. [ABSTRACT FROM AUTHOR]

This paper examines the potential gains in terms of increased social surplus from integrating the power markets in Europe and assesses the scope for free seasonal and diurnal trade in a setting of Third Party Access (TPA). We construct an equilibrium model at the level of the wholesale markets, taking account of the existing power generating infrastructure (of varying flexibility) as well as the existing transmission network interconnecting the countries involved. The model indicates an overall gain from integrating the power markets. Electricity prices are substantially reduced for all regions involved, thus implying a significant redistribution of income from producers to consumers. Trade flourishes with regions establishing themselves as either pure exporters, pure importers or as intermediaries acting as transit countries. [ABSTRACT FROM AUTHOR]

During recent years there has been a growth in the use of assisted reproductive techniques (ARTs) across Europe, America and Australia. This has resulted in debates about whether health insurance should cover this procedure. This study used the closed-ended willingness to pay (WTP) technique to establish the value the infertile place on in vitro fertilization treatment in Scotland. One approach to help inform this debate is to employ economic tools to assess the costs and benefits of the treatment. Costs can then be compared with benefits, and the public provision of the service encouraged or discouraged on the basis of these results. To date, economic evaluations which have attempted to inform the debate about the provision of ARTs have assumed that the only factor that is important is whether users leave the service with a child. One approach that should allow for all such attributes in the economic evaluation is the economic instrument of WTP. This technique is based on the premise that the maximum amount of money an individual is willing to pay for a commodity is an indicator of the value to him/her of that commodity. This paper uses the WTP technique to assess the benefits from ARTs. These benefits are then compared with the costs of providing the treatment. The aim is to show how the application of this specific tool can be of use to policy makers considering the public provision of ARTs.

The paper analyses the sources of persistent interest rate differentials vis-a-vis Germany that have existed in Belgium, Denmark, France, Ireland, Italy, and the Netherlands. In a target zone system like the ERM, interest rate differentials mainly reflect devaluation expectations, which are measured here by raw 1-month Euromarket interest rate differentials, drift-adjusted 1-month differentials, and differentials in long-term government bond yields. The role of a large set of fundamental macroeconomic variables that may have affected these devaluation expectations is investigated within a vector autoregressive (VAR) setting, by means of Granger-causality tests, impulse-response functions and variance decompositions. We find no evidence that fundamentals are more relevant to drift-adjusted devaluation risk than for unadjusted interest rate differentials. A significant impact of inflation, budget deficits, and unemployment becomes evident for almost all ERM-participants. [ABSTRACT FROM AUTHOR]

This paper examines the impact on stock price predictability that the removal of exchange controls had on major European countries during the late 1970s and 1980s. It is found that for Germany, Switzerland and France, the removal of exchange controls led to an increase in the interdependence between these and other markets. In contrast, there is little evidence of an increase in interdependence for the UK and Italy. [ABSTRACT FROM AUTHOR]

The time series properties of unemployment rates for Germany, Japan, the UK and the US are re-examined. Evidence of nonlinear structure in the residuals of the most parsimonious linear ARMA models is reported for all countries except Japan. Modelling this nonlinearity using SETAR models suggests strong asymmetry in unemployment dynamics and the presence of a possible limit cycle for the UK. However, residual diagnostics for these models indicate remaining structure. Alternative TAR models conditioned on past growth rates of industrial production yield substantial reductions in residual variance over both linear and SETAR counterparts, iid residuals in all cases other than the US, and threshold values at or very near zero, clearly identifying the asymmetric behaviour of unemployment during expansionary and contractionary phases of the business cycle. [ABSTRACT FROM AUTHOR]

"In this paper we estimate earnings functions for native born and foreign born white and non-white males in the English labour market, using data from the Quarterly Labour Force Survey.... Our results highlight the importance of distinguishing between native born and foreign born males when investigating the labour market experience of ethnic minorities. Furthermore, the earnings performance amongst white immigrants varies considerably.", (excerpt)

The macro evidence of increased adjustment pressure since the early 1970s suggests that job mobility should have increased. Hence, retrospective and spell data from the German Socio-Economic Panel are combined in order to test the hypothesis that job stability for German workers declined between 1974 and 1994. Using count data regression models in which we control for labour market experience, various demographic factors, and occupation, we find that job stability did not decrease, but if anything increased, between 1974 and 1994. Our finding suggests that labour market inflexibility is an important factor in explaining the European unemployment problem. [ABSTRACT FROM AUTHOR]

We analyse the disinflationary experience between 1979-93 for two traditionally inflationary countries of the European Monetary System: France and Italy. For each country, a vector autoregressive model is estimated. Shocks in the model combine domestic and foreign sources. The latter capture the world oil price shocks as well as nominal and real shocks originating in Germany. Under investigation is the hypothesis that shocks originating in Germany have a spillover disinflationary effect in France and Italy. The empirical evidence provides support to the validity of this hypothesis. Furthermore, German shocks account for an important share of the total price variance in France and Italy. These results indicate that the interaction between countries of the European Monetary System has contributed to the success of the disinflationary experiences of the 1980s. The evidence sheds, therefore, some light on potential benefits that may be further realized as countries of the European Monetary System move towards their objective of achieving a single currency under a united monetary system. [ABSTRACT FROM AUTHOR]

Presents information on a study which analyzed the cost-structure of the railway systems in ten European countries, provided measures of efficiency and identified the sources that have affected the cost structure of the system. Theoretical model; Data and method of estimation; Statistical results; Conclusions.

It has been suggested that members in the EC or the EFTA experienced significantly higher growth rates compared to nonmember countries. This suggests that the European integration either captures omitted variables or that it gives rise to increased growth rates through enhanced investment and/or increased knowledge transfer. The present study attempts to resolve this issue. The analysis identifies a two-link chain between European integration (EI) and growth through investment. In addition, on examining whether there are any knowledge spillovers resulting from integration it is found that integrated countries do in fact experience more knowledge spillovers compared to nonintegrated countries. Employing both the neoclassical and endogenous growth approaches, it is found that trade variables are especially important for growth in Total Factor Productivity (TFP). The study is undertaken for a panel sample consisting of 20 OECD countries and covering three time periods between 1976 and 1990. Special emphasis is placed on specification and sensitivity analysis. [ABSTRACT FROM AUTHOR]

The paper analyses the issue of cost efficiency for eight main European railroads in a sample period of 17 years. Measures of technical and allocative efficiency are obtained from a stochastic cost frontier model, with minimal cost described by a translog cost system. In the model, the cost of allocative inefficiency is estimated simultaneously from the shares' errors, whereas technical inefficiency is modelled by a (half normal) positive departure from the cost frontier. Results show a negligible effect of allocative inefficiency on firms' costs, whereas the cost of technical inefficiency appears to be significant. [ABSTRACT FROM AUTHOR]

In this study we present a model for the outgoing telephone traffic from Spain to a group of 24 European countries. We use a point-to-point model that incorporates the specific characteristics of the international long distance service and the socioeconomic relationships between Spain and this group of countries, taking into account the simultaneity between incoming and outgoing traffic. Recently available data on minutes of conversation in each direction allow us to use panel data for the period 1981-91. We use an orthogonal deviations estimator with instrumental variables. The orthogonal deviations transformation allows the specific unobservable characteristics of each route of traffic to be controlled and the instrumental variables take care of the simultaneity between incoming and outgoing traffic. We estimate a total elasticity of the minutes of outgoing traffic per line with respect to its own real price of - 0.81. Other significant variables are: the volume of trade, the number of visitors from each country, the number of foreign residents and the minutes of incoming traffic. This last variable measures the so-called reciprocal calling effect which is highly significant with a positive elasticity of 0.78. [ABSTRACT FROM AUTHOR]

This paper aims at assessing whether dualism represents a significant source of the aggregate labour productivity convergence observed across the European regions in the 1980s. We use a model of the dual economy based on the work of Dixit (Oxford Economic Papers, 22, 229-34, 1970), and Mas-Colell and Razin (Oxford Economic Papers, 25, 72-79, 1973) to obtain hypotheses to be tested in cross-region growth regressions. We use aggregate and sectoral data for 109 territorial units from 1980 to 1990. Our cross-section results are consistent with the major predictions of the dual model. Ignoring dualism as a source of convergence could therefore lead to inaccurate interpretations of the relative roles played by each of the forces behind the process, and to inexact assessments of what actions should be taken- if any- by the European regional policy to help the process become more pervasive. [ABSTRACT FROM AUTHOR]

This paper argues that the effectiveness of the exchange rate mechanism (ERM) of the European Monetary System (EMS) should be gauged by its impact on the monetary component of real exchange rate variability. Nominal and real shocks are separated using a bivariate structural VAR applied to real exchange rate data of the six original member countries participating in the ERM and a control group consisting of Britain and the United States. The findings suggest that monetary shocks have been an important source of real exchange rate variability and that the ERM has been successful in reducing the incidence of monetary shocks across its member countries prior to the EMS currency crises of 1992-93, while being less successful thereafter. [ABSTRACT FROM AUTHOR]

Examines the convergence properties of productivity among European countries over the period of 1960 to 1997. Use of modified translog production systems to estimate productivity; Estimation of production function with the use of econometric techniques; Application of stationarity tests to examine convergence in common long-run trend.

This study has two principal objectives. The first objective is to measure and compare the performance of European railways. The second objective is to illustrate the usefulness of econometric distance functions in the analysis of production in multioutput industries, where behavioural assumptions such as cost minimization or profit maximization, are unlikely to be applicable. Using annual data on 17 railways companies during 1988-1993, multioutput distance functions are estimated using corrected ordinary least squares (COLS). The resulting technical efficiency estimates range from 0.980 for the Netherlands to 0.784 for Italy, with a mean of 0.863. The distance function results are also compared with those obtained from single-output production functions, where aggregate output measures are formed using either total revenue or a Tornqvist index. The results obtained indicate substantial differences in parameter estimates and technical efficiency rankings, casting significant doubt upon the reliability of these single-output models, particularly when a total revenue measure is used to proxy aggregate output. [ABSTRACT FROM AUTHOR]

The study of spatial price relationships helps to explain market performance and their degree of integration. Applying only one method of analysis may not be flexible enough to account for the complex interactions of prices in separated markets. This paper complements usual cointegration tests with a description of dynamic features and patterns of causality among price series. The method proposed is applied to study spatial pork and lamb prices relationships within the EU in the period 1988-1995. The results indicate that European markets for both commodities are integrated, not only in the long run but in the short run as well, although the price transmission process is more efficient in the porkmeat industry. [ABSTRACT FROM AUTHOR]

The empirical relationship among fiscal contractions, permanent improvement in public finances and short-run economic performance is examined using a sample of 14 European countries over the last three decades. The actual experience of policy-making has taught that only the adjustments that relied heavily on primary expenditure cuts and were implemented over a relatively long time span were able to achieve a long lasting reduction of public liabilities. Indeed, during these consolidations, tax increase amounted to a small fraction of the total adjustment. Furthermore, though they unfolded over a longer period with respect to the unsuccessful ones, the overall budget cut was not larger. As regards the macroeconomic impact, successful episodes tended to be associated with improved economic performance. During the adjustment period and in the following two years, the economies experienced strong consumption and investment growth, reduced unemployment, better international competitiveness and falling interest rates. This empirical evidence is here interpreted via the theory known as expectation view of fiscal policy. [ABSTRACT FROM AUTHOR]

This paper investigates the effects of military and non-military public expenditures on gross private investment using cointegration and error-correction analysis. The latter type of public spending is disagreggated into expenditures of infrastructure, consumption and other general government expenditures. The empirical evidence from four emerging European countries namely, Greece, Ireland, Portugal and Spain suggests that in some cases public capital spending stimulates investment, while in others it depresses it. Also, the results tentatively indicate that defence spending exerts no influence on private investment, thus adding to the ongoing controversy of the economic effects of military spending. [ABSTRACT FROM AUTHOR]

This paper analyses the impact of employment security on labour demand. The approach taken is to estimate a dynamic labour demand function that allows for the effect of changes in a measure of employment security derived from surveys of employers. The estimation uses panel data on employment (both in terms of the total number of employees and total hours worked) for seven European countries for the period 1981–1994. The results suggest that employment security can have significant effects in slowing down the dynamic adjustment of labour demand. The paper also finds some (less robust) evidence that employment security can increase the long run level of labour demand in terms of total hours, but not the number of persons employed. [ABSTRACT FROM AUTHOR]

This paper investigates pricing to market behaviour using data for European auto exports. The empirical analysis uses forward instead of spot exchange rates. Cross-country and cross-product analyses reveal that pricing behaviour depends mainly on the class of product, while the country of origin and destination appears as less important. Furthermore, the data do not usually reject the hypothesis of a symmetric response of export prices to depreciations and appreciations of the exporter's currency. Finally, although the point estimates confirm the combined influence of the business cycle and the direction of the exchange rate movements on pricing to market in most cases, formal tests seldom provide statistical significance for this result. [ABSTRACT FROM AUTHOR]

This paper investigates the nature of the relationship between output and stock prices, and consumption and stock prices, with respect to the different financial structures that exist primarily in the European Union (EU). Evidence is found of a long-run relationship for both relationships, with the exception of Germany and to an extent France, which is argued is due to their bank dominated financial systems. Kalman Filter estimates reveal that both relationships have increased in strength, although little evidence is found of any convergence in the strength of the relationship across the EU. [ABSTRACT FROM AUTHOR]

This paper investigates the long run relationship of real interest rates within a number of economic blocs such as Asia–Pacific, Europe, North America using cointegration analysis and vector error correction models. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to test for price parity across different species of whitefish in the European Union. Price parity is defined by a system of cointegrated prices and would be evidence of a single European market for whitefish. Whitefish are of interest because EU fishers receive the largest share of their income from these fish species. Notwithstanding the single market policy of the EU, by establishing national and regional associations to stabilize or increase the local price of fish, fishers operate as if the European market is made up of separate submarkets with price being determined largely within each submarket. If whitefish markets were price cointegrated such associations would be largely ineffective. In that case, what are required are regulations that encompass the European market. [ABSTRACT FROM AUTHOR]

In this study branching costs and competitiveness of European banks are measured by fitting a monopolistic competition model to a representative sample drawn from nine EEC banking industries in the period from 1990 to 1996. In the theoretical model, banks decide strategically the size of their branching network anticipating the degree of competition faced on interest rates. From the structural equations of the model an econometric test is derived in order to measure branching costs and degree of competition in banking services. The empirical analysis captures their changing over time together with the impact of various European directives aiming at deregulating the banking industry. Furthermore the study shows persistence of segmentation acoss EEC banking industries. [ABSTRACT FROM AUTHOR]

The impact of trade and technology in the European case is assessed. A framework is developed which incorporates employment effects of (i) export expansion (ii) import competition and (iii) labour-saving productivity improvements. In this context, evidence is found for the hypothesis that international trade induces adjustments in technology. [ABSTRACT FROM AUTHOR]

Ten years after the initial Climate Change Convention from Rio in 1992 the industrialized world is finally likely to ratify the Kyoto Protocol, which will impose legally binding greenhouse gas emission reductions on the developed world. However, the Kyoto Protocol will enter into force without the USA, which withdrew under President Bush in March 2001. Accounting for hot air and market power of the Former Soviet Union on emission permit markets, it is shown that US withdrawal has important consequences on environmental effectiveness, compliance costs, and excess costs of market power under the Kyoto Protocol. Non-compliance of the USA implies a dramatic decrease in environmental effectiveness as well as compliance costs of OECD countries whereas the Former Soviet Union and transitional economies in Eastern Europe suffer from a huge decline in permit sales revenues. Excess costs of market power in permit trade increase in relative terms, but decline substantially in absolute terms due to US withdrawal. Policy options are quantified to bypass the problems of hot air and market power through compensation mechanisms. [ABSTRACT FROM AUTHOR]

This article examines the usefulness of the NAIRCU, the 'non-accelerating inflation rate of capacity utilization' as a demand indicator of inflation for eight European countries. So far the NAIRCU has been estimated for the USA only, where it serves as a useful indicator for inflation. In most European countries, deviations from the equilibrium level of capacity utilization influence inflation significantly. Further, the results not only indicate that in more recent periods the NAIRCU has shifted upward, indicating higher efficiency of the production process, but also that confidence intervals have increased over time reducing the usefulness of the NAIRCU somewhat. [ABSTRACT FROM AUTHOR]

Wages in industrialized countries have risen considerably during the last 50 years, whereas hours worked, for manual workers at least, have decreased only marginally. In Europe, one policy response has been to attempt to protect workers from pressure to work long hours by placing legal restrictions on the amount of hours that may be worked each week. This paper examines the possibility that, in fact, observed hours may be the result of a desire of workers to work longer due to a shift in their preferences from leisure to increased consumption, caused by the huge increase in mass media advertising. A cointegrating VAR framework is used to test this hypothesis on UK time series data for both males and females from 1952 to 1997. Advertising is shown to be positively associated with hours worked for both male and female series. Causality tests indicate unidirectional causality, for males and females, from advertising to hours worked. These results suggest that the European policy response is more likely to restrict employee rather than employer discretion over hours. [ABSTRACT FROM AUTHOR]

This paper investigates whether there has been an improvement in and convergence of productive efficiency across European banking markets since the creation of the Single Internal Market. Using efficiency measures derived from DEA estimation, the determinants of European bank efficiency are evaluated using the Tobit regression model approach. The established literature on modelling the determinants of bank efficiency is then extended by recognizing the problem of the inherent dependency of DEA efficiency scores when used in regression analysis. To overcome the dependency problem, a bootstrapping technique is applied. Overall, the results suggest that since the EU's Single Market Programme there has been a small improvement in bank efficiency levels, although there is little evidence to suggest that these have converged. The results also suggest that inference on the determinants of bank efficiency drawn from non-bootstrapped regression analysis may be biased and misleading. [ABSTRACT FROM AUTHOR]

This article examines the regime changes in the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS), applying the duration model approach to weekly data of eight currencies participating in the ERM, covering the complete EMS history. When using the non-parametric (univariate) analysis, it was found that for those regimens with long durations, the ERM would have been relatively stable, while for the (more common) regimes associated with short durations would have been more unstable. The probability of maintaining a certain regime is estimated to be 0.685. When applying a parametric (multivariate) analysis to investigate the role of other variables in the probability of a regime change, it is concluded that the interest rate differential with Germany and the magnitude of the realignment would have negatively affected the duration of a given regime, while credibility would have positively influenced such duration. Finally, when distinguishing between groups of currencies, it is observed that those in the core are more stable than those in the periphery, obtaining evidence against equality of survival functions among these groups of currencies. [ABSTRACT FROM AUTHOR]

Using data from a panel of 15 countries over the period 1990-1998, the determinants of the use of noncash payment instruments are analysed. The estimation results highlight the importance of distinguishing between the determinants of the value and volume of noncash transactions. It is found in fact that the volume of these transactions is generally affected by changes in the determinants more strongly than their value, and that variables such as the interest rate have a different impact on the volume and the value of the transactions. The findings also suggest that past habits play a dominant role in the intensity of use of noncash payment instruments. [ABSTRACT FROM AUTHOR]