Stagflationary bias and the interaction of monetary policy and wages in a unionized economy

Economics Research Centre, School of Economic and Social Studies, University of East Anglia, Norwich NR4 7TJ, U.K. The paper investigates the claim of Gylfason and Lindbeck (Public Choice, 1994) that a stagflationary bias arises from the interaction between monetary policymaking and wagesetting if, among other things, the government and unions share a concern for inflation. It uses a game theoretic model of this interaction, in which the government plays an economy-wide union. Though simple, this nests several other models as special cases. In that corresponding to Gylfason and Lindbeck's model, the factors which they identify are shown to be sufficient for stagflationary bias, in a specified sense. However, for the union to care about inflation is not a necessary condition. The main result of the paper concerns the more general model. It establishes a set of necessary and sufficient conditions for stagflationary bias, as previously defined. These conditions do not include a shared concern for inflation. The paper comments briefly on the significance of this result for stagflation and economic modelling.     

Isolation of the DNA minisatellite probe MZ 1.3 and its application to DNA 'fingerprinting' analysis

A minisatellite probe, MZ 1.3, detecting hypervariable fragment patterns was isolated from a human genomic library. A repetitive sequence of 27 bp length was identified which is contained in the probe approx. 40 times. The MZ 1.3 repeat shows variable homology of 53-73% to the repetitive sequence of the protein III gene of the bacteriophage M13 genome. Polymorphic restriction fragment patterns were found with MZ 1.3 using the enzymes Hinf I, BstN I, Hae III, Mbo I, PstI/Pvu II, and Rsa I. An average of 18 polymorphic fragments was observed using Hinf I as enzyme. The band sharing frequency after Hinf I digestion among unrelated individuals was determined to be 23.8 +/- 7.2%. An example for the application of MZ 1.3 to paternity testing in an incest case is given. The probe can be used with radioactive or non-radioactive detection systems. An approach is presented to compare polymorphic fragment patterns from individuals obtained by independent gel runs on the basis of relative band positions (RBP) and calculated in a computerized analysis.     

Evolving Market Efficiency with an Application to Some Bulgarian Shares

With new technically advanced methods and computers at our disposal, the efficient market hypothesis is once again being debated. At the same time, we are witnessing an unprecedented growth in both existing and new financial markets. These new markets are often in economies which have just recently embraced free market economics; we term these stock markets infant markets. Such stock markets are obviously not efficient in allocating the supply of savings to productive capital. We do not test whether or not these infant markets are informationally efficient, but instead examine whether and how they are becoming more efficient. We propose modelling the excess returns of individual securities using a multi-factor model with time-varying coefficients and generalised auto-regressive conditional heteroskedastic (GARCH) errors. If the markets are becoming more informationally efficient or the agents are learning, we would expect this to manifest itself as the time-varying coefficients becoming more stable as time increases. We test our model using data on four Bulgarian shares. First, we estimate an AR(2) model and a GARCH-M(1,1) model for the shares. Then, we estimated our AR(2) model with time varying coefficients and GARCH type errors. We find varying levels of efficiency and varying speeds of movement towards efficiency within our sample of four shares.