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A New Approach to Understanding Price Stickiness
Why do consumer prices and wages adjust so slowly to changes in market conditions? The rigidity or stickiness of price setting in business is central to Keynesian economic theory and a key to understanding how monetary policy works, yet economists have made little headway in determining why it occurs. Asking About Prices offers a groundbreaking empirical approach to a puzzle for which theories abound but facts are scarce. Leading economist Alan Blinder, along with co-authors Elie Canetti, David Lebow, and Jeremy B. Rudd, interviewed a national, multi-industry sample of 200 CEOs, company heads, and other corporate price setters to test the validity of twelve prominent theories of price stickiness. Using everyday language and pertinent scenarios, the carefully designed survey asked decisionmakers how prominently these theoretical concerns entered into their own attitudes and thought processes. Do businesses tend to view the costs of changing prices as prohibitive? Do they worry that lower prices will be equated with poorer quality goods? Are firms more likely to try alternate strategies to changing prices, such as warehousing excess inventory or improving their quality of service? To what extent are prices held in place by contractual agreements, or by invisible handshakes? Asking About Prices offers a gold mine of previously unavailable information. It affirms the widespread presence of price stickiness in American industry, and offers the only available guide to such business details as what fraction of goods are sold by fixed price contract, how often transactions involve repeat customers, and how and when firms review their prices. Some results are surprising: contrary to popular wisdom, prices do not increase more easily than they decrease, and firms do not appear to practice anticipatory pricing, even when they can foresee cost increases. Asking About Prices also offers a chapter-by-chapter review of the survey findings for each of the twelve theories of price stickiness. The authors determine which theories are most popular with actual price setters, how practices vary within different business sectors, across firms of different sizes, and so on. They also direct economists' attention toward a rationale for price stickiness that does not stem from conventional theory, namely a strong reluctance by firms to antagonize or inconvenience their customers. By illuminating how company executives actually think about price setting, Asking About Prices provides an elegant model of a valuable new approach to conducting economic research.
The origins, evolution and impact of the Australia New Zealand Closer Economic Relations Trade Agreement are examined in this book. ANZCERTA is often referred to as a benchmark for trade agreements. Not only does the book examine the agreement and how it evolved, but it also provides lessons for others, particularly in ASEAN, as they work on regional on bilateral economic relations. The special features of the Agreement are identified, and its evolution is charted. Current debates are reviewed, and assessments of its impact are discussed. Ten lessons for the designers of other agreements are presented.
Le Québec et la Catalogne à l'heure du libre-échange et de la Communauté européenne
Les nationalismes catalan, québécois et canadien - Le Québec, ses régions et la décentralisation - Le libre-échange - Le droit international à l'information face aux technologies de communication - Le marketing au Québec - Politique culturelle et gestion de la culture - Autonomie politique et conflit linguistique - Sentiment national et langue - Perspective culturelle.
Tobacco and the Making of Modern Bulgaria
In Balkan Smoke, Mary Neuburger leads readers along the Bulgarian-Ottoman caravan routes and into the coffeehouses of Istanbul and Sofia. She reveals how a remote country was drawn into global economic networks through tobacco production and consumption and in the process became modern. In writing the life of tobacco in Bulgaria from the late Ottoman period through the years of Communist rule, Neuburger gives us much more than the cultural history of a commodity; she provides a fresh perspective on the genesis of modern Bulgaria itself.
The tobacco trade comes to shape most of Bulgaria's international relations; it drew Bulgaria into its fateful alliance with Nazi Germany and in the postwar period Bulgaria was the primary supplier of smokes (the famed Bulgarian Gold) for the USSR and its satellites. By the late 1960s Bulgaria was the number one exporter of tobacco in the world, with roughly one eighth of its population involved in production.
Through the pages of this book we visit the places where tobacco is grown and meet the merchants, the workers, and the peasant growers, most of whom are Muslim by the postwar period. Along the way, we learn how smoking and anti-smoking impulses influenced perceptions of luxury and necessity, questions of novelty, imitation, value, taste, and gender-based respectability. While the scope is often global, Neuburger also explores the politics of tobacco within Bulgaria. Among the book's surprises are the ways in which conflicts over the tobacco industry (and smoking) help to clarify the forbidding quagmire of Bulgarian politics.
Political Parties and Central Bank Independence in the Industrial Democracies
Banking on Reform examines the political determinants of recent reforms to monetary policy institutions in the industrial democracies. With these reforms, political parties have sought to draw on the political credibility of an independent central bank to cope with electoral consequences of economic internalization and deindustrialization. New Zealand and Italy made the initial efforts to grant their central banks independence. More recently, France, Spain, Britain, and Sweden have reformed their central banks' independence. Additionally, members of the European Union have implemented a single currency, with an independent European central bank to administer monetary policy. Banking on Reform stresses the politics surrounding the choice of these institutions, specifically the motivations of political parties. Where intraparty conflicts have threatened the party's ability to hold office, politicians have adopted an independent central bank. Where political parties have been secluded from the political consequences of economic change, reform has been thwarted or delayed. The drive toward a single currency also reflects these political concerns. By delegating monetary policy to the European level, politicians in the member states removed a potentially divisive issue from the domestic political agenda, allowing parties to rebuild their support constructed on the basis of other issues. William T. Bernhard provides a variety of evidence to support his argument, such as in-depth case accounts of recent central bank reforms in Italy and Britain, the role of the German Bundesbank in the policy process, and the adoption of the single currency in Europe. Additionally, he utilizes quantitative and statistical tests to enhance his argument. This book will appeal to political scientists, economists, and other social scientists interested in the political and institutional consequences of economic globalization. William T. Bernhard is Assistant Professor of Political Science, University of Illinois, Urbana-Champaign.
The Labor Market for Released Prisoners in Post-Industrial America
With the introduction of more aggressive policing, prosecution, and sentencing since the late 1970s, the number of Americans in prison has increased dramatically. While many have credited these “get tough” policies with lowering violent crime rates, we are only just beginning to understand the broader costs of mass incarceration. In Barriers to Reentry? experts on labor markets and the criminal justice system investigate how imprisonment affects ex-offenders’ employment prospects, and how the challenge of finding work after prison affects the likelihood that they will break the law again and return to prison. The authors examine the intersection of imprisonment and employment from many vantage points, including employer surveys, interviews with former prisoners, and state data on prison employment programs and post-incarceration employment rates. Ex-prisoners face many obstacles to re-entering the job market—from employers’ fears of negligent hiring lawsuits to the lost opportunities for acquiring work experience while incarcerated. In a study of former prisoners, Becky Pettit and Christopher Lyons find that employment among this group was actually higher immediately after their release than before they were incarcerated, but that over time their employment rate dropped to their pre-imprisonment levels. Exploring the demand side of the equation, Harry Holzer, Steven Raphael, and Michael Stoll report on their survey of employers in Los Angeles about the hiring of former criminals, in which they find strong evidence of pervasive hiring discrimination against ex-prisoners. Devah Pager finds similar evidence of employer discrimination in an experiment in which Milwaukee employers were presented with applications for otherwise comparable jobseekers, some of whom had criminal records and some of whom did not. Such findings are particularly troubling in light of research by Steven Raphael and David Weiman which shows that ex-criminals are more likely to violate parole if they are unemployed. In a concluding chapter, Bruce Western warns that prison is becoming the norm for too many inner-city minority males; by preventing access to the labor market, mass incarceration is exacerbating inequality. Western argues that, ultimately, the most successful policies are those that keep young men out of prison in the first place. Promoting social justice and reducing recidivism both demand greater efforts to reintegrate former prisoners into the workforce. Barriers to Reentry? cogently underscores one of the major social costs of incarceration, and builds a compelling case for rethinking the way our country rehabilitates criminals.
Merchant Culture in the South, 1820-1865
Becoming Bourgeois is the first study to focus on what historians have come to call the “middling sort,” the group falling between the mass of yeoman farmers and the planter class that dominated the political economy of the antebellum South. Historian Frank J. Byrne investigates the experiences of urban merchants, village storekeepers, small-scale manufacturers, and their families, as well as the contributions made by this merchant class to the South’s economy, culture, and politics in the decades before, and the years of, the Civil War. These merchant families embraced the South but were not of the South. At a time when Southerners rarely traveled far from their homes, merchants annually ventured forth on buying junkets to northern cities. Whereas the majority of Southerners enjoyed only limited formal instruction, merchant families often achieved a level of education rivaled only by the upper class—planters. The southern merchant community also promoted the kind of aggressive business practices that New South proponents would claim as their own in the Reconstruction era and beyond. Along with discussion of these modern approaches to liberal capitalism, Byrne also reveals the peculiar strains of conservative thought that permeated the culture of southern merchants. While maintaining close commercial ties to the North, southern merchants embraced the religious and racial mores of the South. Though they did not rely directly upon slavery for their success, antebellum merchants functioned well within the slave-labor system. When the Civil War erupted, southern merchants simultaneously joined Confederate ranks and prepared to capitalize on the war’s business opportunities, regardless of the outcome of the conflict. Throughout Becoming Bourgeois, Byrne highlights the tension between these competing elements of southern merchant culture. By exploring the values and pursuits of this emerging class, Byrne not only offers new insight into southern history but also deepens our understanding of the mutable ties between regional identity and the marketplace in nineteenth-century America.
What Women and Bees Can Teach Us about Local Trade and the Global Market
Queen bee. Worker bees. Busy as a bee. These phrases have shaped perceptions of women for centuries, but how did these stereotypes begin? Who are the women who keep bees and what can we learn from them? Beeconomy examines the fascinating evolution of the relationship between women and bees around the world. From Africa to Australia to Asia, women have participated in the pragmatic aspects of honey hunting and in the more advanced skills associated with beekeeping as hive technology has advanced through the centuries. Synthesizing the various aspects of hive-related products, such as beewax and cosmetics, as well as the more specialized skills of queen production and knowledge-based economies of research and science, noted bee expert Tammy Horn documents how and why women should consider being beekeepers. The women profiled in the book suggest ways of managing careers, gender discrimination, motherhood, marriage, and single-parenting—all while enjoying the community created by women who work with honey bees. Horn finds in beekeeping an opportunity for a new sustainable economy, one that takes into consideration environment, children, and family needs. Beeconomy not only explores globalization, food history, gender studies, and politics; it is a collective call to action.
A History of Usury and Debt
The practice of charging interest on loans has been controversial since it was first mentioned in early recorded history. Lending is a powerful economic tool, vital to the development of society but it can also lead to disaster if left unregulated. Prohibitions against excessive interest, or usury, have been found in almost all societies since antiquity. Whether loans were made in kind or in cash, creditors often were accused of beggar-thy-neighbor exploitation when their lending terms put borrowers at risk of ruin. While the concept of usury reflects transcendent notions of fairness, its definition has varied over time and place: Roman law distinguished between simple and compound interest, the medieval church banned interest altogether, and even Adam Smith favored a ceiling on interest. But in spite of these limits, the advantages and temptations of lending prompted financial innovations from margin investing and adjustable-rate mortgages to credit cards and microlending.
In Beggar Thy Neighbor, financial historian Charles R. Geisst tracks the changing perceptions of usury and debt from the time of Cicero to the most recent financial crises. This comprehensive economic history looks at humanity's attempts to curb the abuse of debt while reaping the benefits of credit. Beggar Thy Neighbor examines the major debt revolutions of the past, demonstrating that extensive leverage and debt were behind most financial market crashes from the Renaissance to the present day. Geisst argues that usury prohibitions, as part of the natural law tradition in Western and Islamic societies, continue to play a key role in banking regulation despite modern advances in finance. From the Roman Empire to the recent Dodd-Frank financial reforms, usury ceilings still occupy a central place in notions of free markets and economic justice.
Behavioral economics questions the basic underpinnings of economic theory, showing that people often do not act consistently in their own self-interest when making economic decisions. While these findings have important theoretical implications, they also provide a new lens for examining public policies, such as taxation, public spending, and the provision of adequate pensions. How can people be encouraged to save adequately for retirement when evidence shows that they tend to spend their money as soon as they can? Would closer monitoring of income tax returns lead to more honest taxpayers or a more distrustful, uncooperative citizenry? Behavioral Public Finance, edited by Edward McCaffery and Joel Slemrod, applies the principles of behavioral economics to government's role in constructing economic and social policies of these kinds and suggests that programs crafted with rational participants in mind may require redesign. Behavioral Public Finance looks at several facets of economic life and asks how behavioral research can increase public welfare. Deborah A. Small, George Loewenstein, and Jeff Strnad note that public support for a tax often depends not only on who bears its burdens, but also on how the tax is framed. For example, people tend to prefer corporate taxes over sales taxes, even though the cost of both is eventually extracted from the consumer. James J. Choi, David Laibson, Brigitte C. Madrian, and Andrew Metrick assess the impact of several different features of 401(k) plans on employee savings behavior. They find that when employees are automatically enrolled in a retirement savings plan, they overwhelmingly accept the status quo and continue participating, while employees without automatic enrollment typically take over a year to join the saving plan. Behavioral Public Finance also looks at taxpayer compliance. While the classic economic model suggests that the low rate of IRS audits means far fewer people should voluntarily pay their taxes than actually do, John Cullis, Philip Jones, and Alan Lewis present new research showing that many people do not underreport their incomes even when the probability of getting caught is a mere one percent. Human beings are not always rational, utility-maximizing economic agents. Behavioral economics has shown how human behavior departs from the assumptions made by generations of economists. Now, Behavioral Public Finance brings the insights of behavioral economics to analysis of policies that affect us all.