06 August 2012

Akerlof's lemons were rejected 3 times...before getting the Nobel

Akerlof's article excerpt:
"By June of 1967 the paper was ready and I sent it to The American Economic Review for publication. I was spending the academic year 1967-68 in India. Fairly shortly into my stay there, I received my first rejection letter from The American Economic Review. The editor explained that the Review did not publish papers on subjects of such triviality. In a case, perhaps, of life reproducing art, no referee reports were included.

Michael Farrell, an editor of The Review of Economic Studies, had visited Berkeley in 1966-67, and had urged me to submit "Lemons" to The Review, but he had also been quite explicit in giving no guarantees. I submitted "Lemons" there, which was again rejected on the grounds that the The Review did not publish papers on topics of such triviality.

The next rejection was more interesting. I sent "Lemons" to the Journal of Political Economy, which sent me two referee reports, carefully argued as to why I was incorrect. After all, eggs of different grades were sorted and sold (I do not believe that this is just my memory confusing it with my original perception of the egg-grader model), as were other agricultural commodities. If this paper was correct, then no goods could be traded (an exaggeration of the claims of the paper). Besides — and this was the killer — if this paper was correct, economics would be different.

I may have despaired, but I did not give up. I sent the paper off to the Quarterly Journal of Economics, where it was accepted."

04 August 2012

Privatisation, Partisanship and the IMF

Pressures to Privatize? The IMF, Globalization, and Partisanship in Latin America 
By David Doyle, Political Research Quaterly

Despite pervasive downward pressure on government policy from exogenous forces, the author argues that partisanship still exerts an effect on privatization in Latin America. When a country is indebted to the International Monetary Fund (IMF), and a government of the right is in power, scholars can expect increased levels of privatization. However, when a country is indebted to the IMF and a government of the left is in power, electoral incentives will prompt these governments to ignore IMF pressure and reduce levels of privatization. The author tests this argument on a data set of eighteen Latin American countries, between the years 1984 and 1998.

Labour market policy reaction to the crisis in Europe and the US

Southern European countries that are currently facing particularly acute labour market issues have done little in terms of additional training. Italy and Spain have seen the most important increases in spending on unemployment benefits. Only Greece has stepped up spending on employment and start up incentives.

Liberal Market Economies have raised spending on unemployment benefits (particularly strongly for Ireland) but only Ireland has slightly enhanced training. It's also striking to note the reduction in US spending on unemployment benefits between 2009 and 2010.

03 August 2012

New Politics&Society issue

Check out the following two articles
Cooperation in Unlikely Settings: The Rise of Cooperative Labor Relations Among Leading South Korean Firms
Tat Yan Kong
Politics & Society 2012;40 425-452
New Roles for the Trade Unions: Five Lines of Action for Carving Out a New Governance Regime
Peer Hull Kristensen and Robson Sø Rocha
Politics & Society 2012;40 453-479

02 August 2012

Reactions to the economic crisis

New paper by Jonas Pontusson and Damian Raess: "How (and Why) Is This Time Different? The Politics of Economic Crisis in Western Europe and the United States"

This article compares government responses to the Great Recession of 2008–2009 with government responses to recessions and other economic challenges in the period 1974–1982. We focus on five countries: France, Germany, Sweden, the United Kingdom, and the United States. Across these countries, we observe two broad shifts in crisis responses. First, governments have in the recent period eschewed heterodox crisis policies and relied more exclusively on fiscal stimulus. Second, tax cuts have become a more important component of fiscal stimulus while spending cuts have featured more prominently in governments' efforts to consolidate their fiscal position. We argue that crisis responses reflect the interests and power of domestic actors as well as external constraints and the nature of the economic problems at hand.