George Sheldon

The Market for Used Cars: New Evidence of the Lemons Phenomenon

The lemons model assumes that owners of used cars have an information advantage over potential buyers with respect to the quality of their vehicles. Owners of bad cars try to sell them to ill-informed buyers while owners of good cars hold on to theirs. Consequently, the quality of traded automobiles tends to be sub-average. In contrast to previous empirical work, the following article investigates the behaviour of both buyers and sellers, testing for adverse selection by sellers and for quality uncertainty among buyers with a sample consisting of all 1985 cars registered in the Swiss canton of Basle City over the period 1985 to 1991. Our data supports both adverse selection and buyer uncertainty, suggesting that a lemons problem exists.

Foreign Labour, Growth and Productivity: The Case of Switzerland

Up until the first oil shock in 1973, foreign worker migration was generally viewed as a blessing to European growth and development. The most prominent voice to be heard was that of Kindleberger (1967), who held that the major factor behind the remarkable economic growth which most of Europe experienced after 1950 was a large supply of labour provided particularly by unemployed and underemployed workers in Mediterranean countries. However, with the decline in the growth of prosperity in Europe, in the wake of the oil crises, opinion changed rather dramatically. Lower output growth, declining productivity gains, and stagnating employment made it seem that the only purpose a foreign labour force could still hope to serve was to fill the already burgeoning unemployment rolls in the host countries. Tight labour markets have, in turn, led to increased social stress and cultural tension between foreign and domestic populations in the recipient countries, and thus given cause to question the astuteness of earlier immigration policies.

Struktur der arbeitsnachfrage im technologischen Wandel — Eine empirische analyse für die Bundesrepublik Deutschland

SummaryThe Structure of Labour Demand and Technical Change: An Empirical Investigation for the Federal Republic of Germany. - The estimation of translog models using German industry data for the period 1960–1981 indicates that technical progress is capital-using and at the same time saves blue-collar labour. For some industries, evidence for white-collar labour saving technical progress is found whilst for others white-collar labour using technical change is indicated. The analysis of more disaggregated labour data shows that for white-collar and blue-collar workers alike, technical change favours the higher-skilled performance groups. Furthermore, it is indicated that blue-collar labour is a substitute for white-collar labour and capital, whereas only a weak substitutive and sometimes even complementary relationship exists between white-collar labour and capital.RésuméLa structure de la demande de main d’oeuvre et changement technique: une investigation empirique de la RFA. - L’estimation des modèles translog avec des données de l’industrie allemande pour la période 1960–1981 indique que le progrès technique use des capitaux et simultanément économise des ouvriers. Pour quelques industries, il y a l’évidence que le progrès technique est accompagné par une économie d’employées de bureau, pour d’autres qu’il est accompagné par une augmentation de la nombre des employées. L’analyse des données de la main d’∄uvre qui sont plus désagrégées démontre que pour les ouvriers aussi bien que les employées le changement technique favorise les groupes les plus qualifiés. De plus, il est indiqué que les ouvriers sont un substitut pour les employées et le capital pendant qu’une faible relation substitutive et parfois mÊme complémentaire existe entre les employées de bureau et le capital.ResumenLa estructura de la demanda de trabajo y el cambio tecnológico: una investigación empírica para la RepÚblica Federal de Alemania. - La estimación de modelos «translog» utilizando datos de la industria alemana para el período 1960–1981 indica que el cambio tecnológico insume capital y a la vez ahorra mano de obra obrera. Se encuentra evidencia en favor de un progreso técnico que en algunas industrias ahorra mientras que en otras insume mano de obra de oficina. El análisis de datos laborales más desagregados muestra que para ambas categorías de mano de obra el cambio technolÔgico favorece a los grupos de mayor calificación. Además, la mano de obra obrera resulta ser sustituto de la mano de obra de oficina y del capital, mientras que la relatión entre la mano de obra de oficina y el capital resulta sólo moderadamente sustitutiva y en algunos casos hasta complementaria.

Unemployment and Monetary Policy in Switzerland

SummaryThis paper investigates the impact of the monetary policy change of the Swiss National Bank (SNB) in 1999 on the Swiss labor market on the basis of a Phillips relationship. Theoretical considerations as well as previous empirical work suggest that the SNB’s shift to a more inflation-targeted policy should have increased real-wage flexibility and lowered the NAIRU, the sacrifice ratio, and the level and persistence of inflation in Switzerland. Our results tend to confirm these expectations, although a number of the measured effects are not statistically significant.