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In 2013, the state of North Carolina reformed its state Unemployment Insurance (UI) program by reducing the maximum number of payment weeks and reducing the maximum weekly insurance payment. This paper investigates two hypotheses associated with such reform. The first hypothesis is a moral-hazard argument: limiting or removing UI payments should boost job search effort by the unemployed and lead to more rapid return to employment. The second hypothesis is a labor-force participation incentive: given the job-search requirement for receiving UI payments, limiting or removing those payments should reduce those actively unemployed and increase those who exit the labor force. I use panel data created from the Current Population Survey to create time-varying transition probabilities between employed, unemployed and non-participating labor status for individuals aged 25-54. I test the difference in these transition probabilities for North Carolina against those for the rest of the US. Using an event study based on the implementation of UI reform in North Carolina, I find no evidence for the moral-hazard hypothesis but strong evidence of exit from the labor force in North Carolina associated with the UI reform. Simulations calibrated to historical North Carolina labor force statistics indicate that 80,000 workers transitioned from unemployment to non-participation at the time of the reform, while employment creation for the unemployed underperformed that in the rest of the US. I also consider the impact of this reform on employer behavior through analysis of job vacancies recorded by Help Wanted Online. The reform coincided with negative growth in help-wanted ads in North Carolina: this performance is a negative outlier in comparisons with the job-creation record in other United States. There is no indication that the reform triggered an increase in job creation.

Transition economies, and especially those of the former Soviet Union, have used fixed exchange-rate policy as a nominal anchor for interest rates and inflation during recent decades. In this paper I demonstrate that the rigorous application of this policy in Ukraine over the period 1999–2005 did not in fact eliminate significant deviations of Ukrainian interbank interest rates from those on the London interbank market. Estimation using weekly data over the period 1999–2005 illustrates that the government’s “nominal anchor” policy vis a vis the US dollar was effective at eliminating the risk of currency depreciation. However, other risks related to convertibility and liquidity were either not addressed or exacerbated, and thus deviations from uncovered interest parity continued through the period. This has a clear policy implication: monetary and financial-sector policy should be coordinated to eliminate convertibility and liquidity risk as well as the risk of currency depreciation.

The present experiment investigated the relationship between laboratory measures of self-control and delay of gratification in children and explored several other factors that may influence self-control. In the self-control paradigm, 30 four-year-old children repeatedly chose between three reinforcers received after a delay and one reinforcer received immediately. A self-imposed delay modification allowed participants to reverse their choices to the smaller, less delayed reinforcer during the delay to the larger reinforcer. In the delay-of-gratification paradigm, the children received three reinforcers if they waited 20 min until the experimenter returned or one reinforcer if they terminated the trial by ringing a bell. A strong positive correlation between the proportion of self-control choices in the self-control paradigm and the wait times in the delay-of-gratification paradigm was found, suggesting concurrent validity between the two measures. In addition, the exposure to visual food cues had no consistent effect across participants on choice in either measure.

We examine the impact of IMF programs on economic performance in 95 developing countries over the period 1993–2002. Three macroeconomic measures of economic performance are considered: the real per capita economic growth rate, the ratio of the fiscal surplus to GDP, and the ratio of the current account surplus to GDP. Three estimation techniques are used: censored-sample, full-sample instrumental-variable, and matching. Substantively, we find little statistical support that IMF programs contemporaneously improve real economic growth in participating countries, but stronger evidence of an improvement in economic growth in years following a program. We find that both the fiscal ratio and the current-account ratio improve contemporaneously with IMF participation relative to the counterfactual, with effects in succeeding years differing little from the impact effects. We conclude that the program-effect estimates of matching and other estimators will differ largely because of the sample included in estimation. Matching by its nature excludes country episodes associated with extreme values of the propensity score, while the instrumental-variable estimator includes those. If there is heterogeneity of performance response in extreme vs. moderate cases, the estimates differ systematically between the two techniques.

Daniel Trefler’s article in this journal (Daniel Trefler, 1995) is an excellent investigation of observed patterns and volumes of trade. He identifies the theoretical predictions of factorproportions models of international trade put forward by Eli F. Heckscher (1991), Bertil G. Ohlin (1991), and Jaroslav Vanek (1968) and summarizes these as the HOV model. These theoretical predictions lead to a number of “mysteries” when examined empirically— “mystery” being a code word for rejection by the data. He then introduces a number of extensions of the HOV model, and gauges empirically the extent to which the modified HOV model is rejected relative to each extension. For each extension, he examines the persistence of the mysteries; in his favored specification of country-specific neutral technological difference and preference for home goods in demand, the anomalies in the data are found to be greatly reduced. In this paper, I demonstrate that there are alternative explanations for the mysteries that Trefler identified. I indicate the features of the data that lead to the mysteries and provide an intuitive separation of the mysteries into those observed in the pattern of trade and those observed in the volume of trade. Econometric tests demonstrate that explanations other than those put forward by Trefler are better supported by the data. There are three specific contributions of this Comment. First, alternative explanations of the success of Trefler’s preferred specification in modeling variation in trade data are put forward. Second, a nonparametric method for calculating the degree of mismeasurement of factor scarcity is introduced and the improvement in explanatory power of that method is measured. Third, statistical comparison of an explanation of the observed antitrade bias rooted in factor-specific differences in domestic factor mobility with Trefler’s explanation based upon country-specific productivity differences and home bias in expenditures yields the conclusion that differences in domestic factor mobility is the preferred explanation. These results, taken together, suggest that theories designed to explain observed trade patterns and volumes should reexamine the proxy for factor scarcity derived in the HOV model and should allow for the impact of factor-specific differences in the domestic mobility of factors of production.

We describe the operational capabilities of the Las Cumbres Observatory Global Telescope Network. We summarize our hardware and software for maintaining and monitoring network health. We focus on methodologies to utilize the automated system to monitor availability of sites, instruments and telescopes, to monitor performance, permit automatic recovery, and provide automatic error reporting. The same jTCS control system is used on telescopes of apertures 0.4m, 0.8m, 1m and 2m, and for multiple instruments on each. We describe our network operational model, including workloads, and illustrate our current tools, and operational performance indicators, including telemetry and metrics reporting from on-site reductions. The system was conceived and designed to establish effective, reliable autonomous operations, with automatic monitoring and recovery - minimizing human intervention while maintaining quality. We illustrate how far we have been able to achieve that., 13 pages, 9 figures

Despite its adoption of a nominal-anchor exchange-rate policy during the period 1999-2005, Ukrainian financial markets were subject to substantial premia in interest rates on interbank markets relative to what is observed in Euro credit markets. In this paper I demonstrate that there were three independent premia, and that these sources had different causes. Estimation of a stochastic-discount-factor model using weekly data over the period 1999-2005 illustrates that the government’s “nominal anchor” policy vis a vis the US dollar was effective at eliminating the risk of currency depreciation. However, other risks related to convertibility and liquidity were either not addressed or exacerbated, and thus deviations from uncovered interest parity continued through the period. Future monetary and financial-sector policy should be calibrated to address all three.

Despite its adoption of a nominal-anchor exchange-rate policy during the period 1999-2005, Ukrainian financial markets were subject to substantial premia in interest rates on inter-bank markets relative to what is observed in Euro credit markets. In this paper I demonstrate that there were three sources of this risk premium, and that these sources had different causes. Estimation using weekly data over the period 1999-2005 illustrates that the government's nominal anchor policy vis a vis the US dollar was effective at eliminating the risk of currency depreciation. However, other risks of convertibility and liquidity were either not addressed or exacerbated. Future monetary and financial-sector policy should be calibrated to address all three to avoid the financial crises that have affected other emerging economies.

The large and widening gap between economic performance in Eastern European transition economies and those of the former Soviet Union has been dubbed "the Great Divide" by Berglof and Bolton (2002). This paper provides a rationale for the gap based upon the concept of financial repression. The magnified effects of transition to the market can be attributed to the government manipulation of financial markets in these countries, with the divide defined by the length of time that governments relied upon financial-market manipulation to finance government fiscal policy. Policies undertaken to assist in financing government expenditures caused financial repression and financial fragmentation, to use the terms introduced by McKinnon (1973). After an introductory section, I introduce a theoretical model of real and financial sectors in transition. The dynamic path to equilibrium from transition is derived. It is shown to have a tendency toward output contraction and hyperinflation when government policies promote financial repression. In the third section this hypothesis is examined with macroeconomic data from Ukraine for the period 1992 - 2001. This data is consistent with the hypothesis, although other factors (e.g., recession in trading partners) are also shown to be important.

To explain the poor macroeconomic performance of the transition economies, particularly in terms of economic growth and inflation, it is necessary first to understand the economic principles governing the individual’s choice to save. These economic principles will serve as a structure for the subsequent investigations of the volume

Policy-makers in most countries, if offered the opportunity to have zero economic growth and 100 percent annual inflation on average for the next three years, would quickly turn down the opportunity. For the transition economies, however, this record during the period 1995–1997 was cause for satisfaction. As documented in the earlier chapters, these countries were coming out of one of the most devastating periods in any country’s economic history. The results in the period 1995–1997 suggested hope for the future

The preceding chapters provided an overview of economic growth and inflation experience in the transition economies in the years since independence and a detailed look at saving in those economies. In this chapter the linkages among growth, inflation and saving behavior are specified more precisely and are examined through statistical analysis

This volume has put forward a simple hypothesis: that the availability of saving in financial instruments that can be issued by the government, enterprises and investors is a critical requirement for positive economic growth and the absence of inflation. In the stabilization period, as noted in earlier chapters, the availability of saving was assured through attraction of foreign saving in the stocks and bonds of the transition economies. This was a successful strategy so long as the supply of foreign saving was sufficient to meet the transition economies’ demands. However, the shortcomings of this approach were made evident in the period surrounding the Russian financial crisis of August 1998

In the transition economies the period from independence through 1994 was identified with crisis in earlier chapters, and those who lived through it will certainly agree. The crisis period was characterized by extreme economic collapse throughout the former Soviet Union. Table V.1) provides annual economic growth figures for the period 1991–1994, and highlights the message of chapter I: while there is variation across countries, every one of the transition economies experienced a significant fall in production that persisted and intensified through this period

Georgia’s economic course since independence has been tumultuous. During an initial period, the government used the aforementioned directed-credits mechanism in an effort to sustain the pre-independence status quo in production and employment, but brought about hyperinflation and massive financial fragmentation. Once stabilization policies were introduced that reflected the post-independence economic realities of the country, these financial imbalances were gradually righted. With the introduction of a new currency in September 1995, the financial sector developed rapidly and in positive directions. The collapse of Russian financial markets in 1998 had a de-stabilizing effect, however, that the policy-makers faced in a return to crisis

Belarus stands out among the former constituent nations of the Soviet Union in two dimensions. First, its economic collapse was less pronounced in the crisis period, while its economic recovery in the stabilization period has been below average for these states. Second, it has been a relatively high-inflation economy during both periods. The former suggests an economy relatively slow to introduce market reforms; the latter suggests an economy with larger-than-average excess demands for saving ex ante. Surprisingly, the government of Belarus ranks among the least deficitary when general government budget balances are measured as a percent of GDP, with only the Baltic states rivalling the near-balance reported by Belarus. This is documented in Tabele III.1 and Figuga V.2

The Ukrainian economy survived a difficult crisis period with output reductions and hyperinflation that rivalled, and in most cases exceeded, those observed elsewhere. Its success in curbing inflation during the stabilization period is evident, but the output record remained mediocre. The model of chapter III provides a theoretical structure within which the determinants of this economic performance can be investigated. This chapter presents empirical evidence for Ukraine based upon the predictions of that model

The stimulation of private saving is essential to both stabilization and structural adjustment in the transition economies. Private saving in these countries has declined sharply since independence, and this decline has been a factor in the onset of extreme inflation because governments have resorted to an inflation tax to finance deficit spending. The author examines evidence on spending in Belarus, Georgia, Kazakhstan, and Ukraine. He examines decisions about whether to save,and in which specific financial or real instruments. He summarizes the evolution of financial sectors in these countries to provide a history of the success or failure of financial institutions to intermediate between private savers and the government as borrower. He concludes that private saving has indeed declined since independence, but less than is indicated by banking system statistics. Concurrent with this downturn has been a shifting of financial assets from bank deposits to alternative financial instruments, including foreign currency,"trust company"shares, and private loans. The financial sector has reacted slowly to this change, but the most successful commercial banks have recognized the change in demand for financial instruments and have accommodated the savers. The state commercial banks - especially the successor to the Soviet Saving Bank - have been slow to adjust to the new environment. As a result, the near-monopoly that banks once held deposits has been rapidly eroded. Government methods for mobilizing funds must change, contends the author. Governments are not typically prepared to borrow savings from the these new instruments, since they are denominated in foreign currency or are offered only at positive real interest rates. That attitude must change if governments are to make needed investments in infrastructure and to avoid creating inflationary credit.

Globalization has become a center of attention and a focus of both fears and hopes. Various disputes remain over the essence of globalization or whether the world today is more “globalized” than a century ago. To unlock this conundrum we suggest to make the critical distinction between globalization as a process, as an outcome and as a perception. The contributions of this volume provide a rejection of what we take as the core of the globalization argument, the withering away of the social effects of location and spatial settings. Territorial differences are likely to continue to create differences in cultural, political and economic activity. The “failure” of globalization as a predictive theory stems from a confiision of potential with actual and perceived homogeneity.

Cash shortages were a persistent and recurrent phenomenon in many of the economies of the former Soviet Union during the two-year period after the dissolution of the Soviet Union in 1991. These were largely, but not exclusively, shortages of ruble bank notes and were coincident with a period of rapid commodity price increases. The shortages exacerbated the difficulties of economic transition in the productive sectors, caused a decline in the faith of citizens in their governments’ ability to manage the economies, and greatly increased political tensions among these economies.

. . manufacturing activities are subject of increasing returns to scale-both of a static and a dynamic kind-and under these conditions the presumption derived from Ricardo's doctrine of comparative costs-the presumption that free trade secures the best allocation of resources to each and every participant, and that there must be net gain from trade all round-no longer holds. For under these conditions it can be demonstrated that free trade may lead to stunted growth, or even impoverishment of some regions (or countries) to the greater benefit of others.

Preface Introduction: Latin American Debt and the Transfer Problem The Transmission of External Shocks to Latin America Debt, Depression and Real Rates of Interest in Latin America Lessons of the Past: The Role of External Shocks in Chilean Recessions, 1926-1982 The Transmission of Terms-of-Trade Shocks Fiscal Constraints and the Adjustment Process Fiscal Lags and the Problem of Stabilization: Argentina's Austral Plan Adjustment to Interest Rate Shocks in Latin America and the Caribbean Financial Market Instability and External Shocks Macroeconomic Instability and Moral Hazard in Banking in a Liberalizing Economy The Chilean Financial Collapse Labor Market Disequilibrium and Adjustment Labor Market Adjustment with Wage Indexation: The Case of Chile Between 1974-1980 Monetary and Exchange Rate Policies Debt and Adjustment in the Dominican Republic: The Second Time Around Exchange Controls and the Breakdown of Central American Trade in the 1980s The Equilibrium Exchange Rate of the Mexican Peso: A Monetary Approach The Political Economy of Stabilization Programs Debt, Stabilization, and Liberalization in Costa Rica: Political Economy Responses to a Fiscal Crisis Recession and Adjustment in the Dominican Republic: 1983-1985 Long-Run Trade Strategies for Latin America International Commodity Trade and Latin American Exports: An Empirical Investigation Bibliography Index

The Algerian macroeconomic response to oil windfalls, which differs from that expected of a neoclassical economy, is examined through application of ‘fix-price’ equilibrium analysis. A model of the aggregate macroeconomy is specified and its response decomposed into behavioral and involuntary spillover elements. The implications of Classical unemployment are derived. Econometric estimation of the model for the period 1966–1984 supports the importance of involuntary spillovers as an explanation of Algeria's unusual pattern of demand and money balance accumulation; rationing is shown to have been considerable relative to observed consumption in recent years. Two major conclusions are drawn. (1) Fix-price modeling captures an important feature of the Algerian economy during this period; analyses ignoring spillovers will provide biased results. (2) Conventional neoclassical estimation will in general confound behavioral parameters and spillover effects for countries where the price mechanism is not permitted to operate freely. This will lead to biased behavioral estimates and inaccurate policy advice.