What works best for getting the unemployed back to work: employment services or small-business assistance programs? evidence from Romania

Recent empirical evidence has found that employment services and small-business assistance programmes are often successful at getting the unemployed back to work. Â One important concern of policy makers is to decide which of these two programmes is more effective and for whom. Â Using unusually rich (for transition economies) survey data and matching methods, I evaluate the relative effectiveness of these two programmes in Romania. Â While I find that employment services (ES) are, on average, more successful than a small-business assistance programme (SBA), estimation of heterogeneity effects reveals that, compared to non-participation, ES are effective for workers with little access to informal search channels, and SBA works for less-qualified workers and those living in rural areas. Â When comparing ES to SBA, I find that ES tend to be more efficient than SBA for workers without a high-school degree, and that the opposite holds for the more educated workers.

The Black Box of Business Dynamics

Research in business dynamics has been advancing rapidly in the last years but the translation of the new knowledge to industrial policy design is slow. One striking aspect in the policy area is that although research and analysis do not identify the existence of an specific optimal rate of business creation and business exit, governments everywhere have adopted business start-up support programs with the implicit principle that the more the better. The purpose of this article is to contribute to understand the implications of the available research for policy design. Economic analysis has identified firm heterogeneity as being the most salient characteristic of industrial dynamics, and so a better knowledge of the different types of entrepreneur, their behavior and their specific contribution to innovation and growth would enable us to see into the ‘black box’ of business dynamics and improve the design of appropriate public policies. The empirical analysis performed here shows that not all new business have the same impact on relevant economic variables, and that self-employment is of quite a different economic nature to that of firms with employees. It is argued that public programs should not promote indiscriminate entry but rather give priority to able entrants with survival capacities. Survival of entrants is positively related to their size at birth. Innovation and investment improve the likelihood of survival of new manufacturing start-ups. Investment in R&D increases the risk of failure in new firms, although it improves the competitiveness of incumbents.

Macroeconomic shocks and the business cycle: evidence from a structural factor model

We use a dynamic factor model to provide a semi-structural representation for 101 quarterly US macroeconomic series. We find that (i) the US economy is well described by a number of structural shocks between two and six. Focusing on the four-shock specification, we identify, using sign restrictions, two non-policy shocks, demand and supply, and two policy shocks, monetary and fiscal. We obtain the following results. (ii) Both supply and demand shocks are important sources of fluctuations; supply prevails for GDP, while demand prevails for employment and inflation. (ii) Policy matters, Both monetary and fiscal policy shocks have sizeable effects on output and prices, with little evidence of crowding out; both monetary and fiscal authorities implement important systematic countercyclical policies reacting to demand shocks. (iii) Negative demand shocks have a large long-run positive effect on productivity, consistently with the Schumpeterian "cleansing" view of recessions.

Business Exits entail greater future levels of entrepreneurship? An empirical analysis at country level

Using Global Entrepreneurship Monitor data for 41 countries this study investigates the impact of business exit on entrepreneurial activity at the country level. The paper distinguishes between two types of entrepreneurial activity according with the motive to start a new business: entrepreneurs driven by opportunity and necessity motives. The findings indicate that exits have a positive impact on future levels of entrepreneurial activity in a country. For each exit in a given year, a larger proportion of entrepreneurial activity the following year. Moreover, this e ffect turns out to be higher for opportunity entrepreneurs. The findings indicate that both types of entrepreneurial activity rates are influenced by the same factors and in the same direction. However, for some factors we find a di fferential impact on the entrepreneurship. The results show some important implications given that business exit may be overcome when there is a necessity motivation. This has important implications for both researchers and policy makers. JEL codes: L26. Keywords: Entrepreneurship, business exit, social values

The migration towards Digital Terrestrial Television: challenges for public policy and public broadcasters

This paper initially identifies the main transformations of the television system that are caused by digitalization. Its development in several broadcasting platforms is analyzed as well as the particular obstacles and requirements that are detected for each of them. Due to its technical characteristics and its historical link to the public services, the terrestrial network requires migration strategies different from those strictly commercial, and public intervention might be needed. The paper focuses on such migration strategies towards DTT and identifies the main issues for public intervention in the areas of the digital scenario: technology, business and market transformation and the reception field. Moreover, it describes and classifies the challenges that public broadcasters should confront due to digitalization. This paper finally concludes that the leadership of the public broadcasters during the migration towards DTT is an interesting tool for public policy. The need for foster the digitalization of the terrestrial platform and to achieve certain social and public goal besides the market interest brings an opportunity for public institutions and public broadcasters to work together. That leading role could also be positive for the public service to face its necessary redefinition and reallocation within the digital context.

Monetary policy rules and macroeconomic stability: Evidence and some theory

We estimate a forward-looking monetary policy reaction function for thepostwar United States economy, before and after Volcker's appointmentas Fed Chairman in 1979. Our results point to substantial differencesin the estimated rule across periods. In particular, interest ratepolicy in the Volcker-Greenspan period appears to have been much moresensitive to changes in expected inflation than in the pre-Volckerperiod. We then compare some of the implications of the estimated rulesfor the equilibrium properties of inflation and output, using a simplemacroeconomic model, and show that the Volcker-Greenspan rule is stabilizing.

First impressions matter: Signalling as a source of policy dynamics

We first establish that policymakers on the Bank of England's Monetary PolicyCommittee choose lower interest rates with experience. We then reject increasingconfidence in private information or learning about the structure of the macroeconomy as explanations for this shift. Instead, a model in which voters signal theirhawkishness to observers better fits the data. The motivation for signalling is consistent with wanting to control inflation expectations, but not career concerns orpleasing colleagues. There is also no evidence of capture by industry. The papersuggests that policy-motivated reputation building may be important for explainingdynamics in experts' policy choices.

The role of interbank markets in monetary policy: A model with rationing

This paper analyses the impact of asymmetric information in the interbankmarket and establishes its crucial role in the microfoundations of the monetarypolicy transmission mechanism. We show that interbank market imperfectionsinduce an equilibrium with rationing in the credit market. This has two majorimplications: first, it reconciles the irresponsiveness of business investment to theuser cost of capital with the large impact of monetary policy (magnitude effect)and, second, it shows that banks liquidity positions condition their reaction tomonetary policy (Kashyap and Stein liquidity effect).

Is lumpy investment really irrelevant for the business cycle?

New-Keynesian (NK) models can only account for the dynamic effects of monetary policy shocks if it is assumed that aggregate capital accumulation is much smoother than it would be the case under frictionless firm-level investment, as discussed in Woodford (2003, Ch. 5). We find that lumpy investment, when combined with price stickiness and market power of firms,can rationalize this assumption. Our main result is in stark contrast with the conclusions obtained by Thomas (2002) in the context of a real business cycle (RBC) model. We use our model to explain the economic mechanism behind this difference in the predictions of RBC and NK theory.

Disability, capacity for work and the business cycle: An international perspective

An important policy issue in recent years concerns the number of people claimingdisability benefits for reasons of incapacity for work. We distinguish between workdisability , which may have its roots in economic and social circumstances, and healthdisability which arises from clear diagnosed medical conditions. Although there is a linkbetween work and health disability, economic conditions, and in particular the businesscycle and variations in the risk of unemployment over time and across localities, mayplay an important part in explaining both the stock of disability benefit claimants andinflows to and outflow from that stock. We employ a variety of cross?country andcountry?specific household panel data sets, as well as administrative data, to testwhether disability benefit claims rise when unemployment is higher, and also toinvestigate the impact of unemployment rates on flows on and off the benefit rolls. Wefind strong evidence that local variations in unemployment have an importantexplanatory role for disability benefit receipt, with higher total enrolments, loweroutflows from rolls and, often, higher inflows into disability rolls in regions and periodsof above?average unemployment. Although general subjective measures of selfreporteddisability and longstanding illness are also positively associated withunemployment rates, inclusion of self?reported health measures does not eliminate thestatistical relationship between unemployment rates and disability benefit receipt;indeed including general measures of health often strengthens that underlyingrelationship. Intriguingly, we also find some evidence from the United Kingdom and theUnited States that the prevalence of self?reported objective specific indicators ofdisability are often pro?cyclical that is, the incidence of specific forms of disability arepro?cyclical whereas claims for disability benefits given specific health conditions arecounter?cyclical. Overall, the analysis suggests that, for a range of countries and datasets, levels of claims for disability benefits are not simply related to changes in theincidence of health disability in the population and are strongly influenced by prevailingeconomic conditions. We discuss the policy implications of these various findings.

Research joint ventures and optimal R&D policy with asymmetric information

When to allow Research Joint Ventures (RJVs) or not is an importantinstrument in the development of an optimal R&D policy. Theregulator, however, is unlikely to know all the relevant informationto regulate R&D optimally. The extent to which there existappropriability problems between the firms is one such variable thatis private information to the firms in the industry. In a duopolysetting we analyze the characteristics of a second-best R&D policywhere the government can either allow RJVs or not and give lump-sumsubsidies to the parties involved. The second-best R&D policy withoutsubsidies will either block some welfare improving RJVs or allow somewelfare reducing ones. With lump-sum subsidies, the second-best policytrades off the expected subsidy cost with allowing welfare decreasingRJVs or blocking welfare increasing ones.

Endogenous business cycles and stabilization policies

The paper reports results on the effects of stylized stabilization policies on endogenously created fluctuations. A simple monetary model with intertemporally optimizing agents is considered. Fluctuations in output may occur due to fluctuations in labor supply which are again caused by volatile expectations which are ``self fulfilling'', i.e. correct given the model. It turns out that stabilization policies that are sufficiently countercyclical in the sense that government spending (on transfers or demand) depends sufficiently strongly negatively on GNP-increases can stabilize the economy at a monetary steadystate for an arbitrarily low degree of distortion of that steady state. Such stabilization has unambiguously good welfare effects and can be achieved without features such as positive lump sum taxation or negative income taxation as part of the stabilization policy.

Students competences in Business Administration subjects

The evaluation of the competences acquired by the students in the context of a university education system is needed to enable professors to develop teaching-learning processes tailored to students" needs. The main goal of this paper is to analyze in depth the profile of the acquired competences of the bachelor students in Business Administration subjects. In that sense, this paper explains an experience in assessing bachelor student"s competences by applying an ICT-based digital platform designed for the selfassessment of personal and social competences. In particular, we apply an evaluation tool which was specifically designed for self-evaluating the project managers" generic and specific competences. The authors of this research have previous experience in implementing this evaluation tool in the subjects of Business Administration, Operations Management and Strategic Management taught in the Faculty of Economics and Business of the University of Barcelona. In this paper, the results show that there exist significant differences in the self-evaluation of competences depending on the respondent gender. This kind of tools benefits the three parties involved: students, university managers and organizations, and should be applied along the Bachelor as a transversal project and adapt the programs to achieve graduate students with higher levels of social and personal competences, as demanded by the labour market.

The First Privatization Policy in a Democracy: Selling State-Owned Enterprises in 1948-1950, Puerto Rico

In the 1940s, when the Governor of Puerto Rico was appointed by the US President and the Puerto Rican government was answerable only to the US Federal government, a large state-owned enterprise (SOE) sector was established on the island. Public services such as water, transportation and energy were nationalized, and several new manufacturing SOEs were created to produce cement, glass, shoes, paper and chalkboard, and clay products. These enterprises were created and managed by government-owned corporations. Later on, between 1948 and 1950, under the island’s first elected Governor, the government sold these SOEs to private groups. This paper documents both the creation and the privatization of the SOE sector in Puerto Rico, and analyzes the role played by ideology, political interests, and economic concerns in the decision to privatize them. Whereas ideological factors might have played a significant role in the building of the SOE sector, we find that privatization was driven basically by economic factors, such as the superior efficiency of private firms in the sectors where the SOEs operated, and by the desire to attract private industrial investment to the Puerto Rican economy.