Governments,trade unions and the macroeconomy: An expository analysis of the political business cycle

We have briefly reviewed the state of the art of research on the political business cycle in the context of a simple textbook model of the macroeconomy. It has been demonstrated that the government-generated political business cycle vanishes as expectations turn rational. Even then, however, non-inflationary policies apparently are time inconsistent. Hence, democracies seem to be stuck with some sort of inflationary bias.Countries with fairly centralized wage bargaining and strong labor unions have to deal with a second political source of instability in the macroeconomy: if the labor union's program contains political items such as equal educational opportunities for working class children, extended co-determination, a more equal distribution of wealth, and the like, they will prefer to see those parties in power who show the best prospects of implementing those items. So the trade union's wage bargaining strategies take into account how bargaining results influence the state of the economy and, hence, the reelection prospects of the ruling government — and they will do so in different ways, depending on whether the union prefers the government to the opposition party or vice versa.     

Innovativer Föderalismus? – Das österreichische Naturschutzrecht zwischen Deregulierungsdruck und Europäisierung

Die Angelegenheiten des Natur- und Landschaftsschutzes stellen im Bundesstaat ?sterreich eine wichtige und vergleichsweise abgerundete Landeskompetenz dar. Sie sind in den Kompetenzartikeln der Bundesverfassung nicht ausdrücklich erw?hnt und fallen daher unter die Generalklausel des Art. 15 Abs. 1 der Bundesverfassung (B-VG) und damit in die ausschlie?liche Zust?ndigkeit der L?nder in Gesetzgebung und Vollziehung. Dies bedeutet freilich nicht, dass in der Praxis nicht zahlreiche Abgrenzungsfragen auftauchen würden, weil eine Vielzahl von Umweltschutzkompetenzen, wie etwa das Wasserrecht und das Forstrecht der Gesetzgebungskompetenz des Bundes zugewiesen sind.     

Law is Myth

International Journal for the Semiotics of Law - Revue internationale de Sémiotique juridique - Any title for this paper beginning with the words “law as...” would have been...     

Alive and well: the good faith principle in Turkish contract law

Good faith is a principle prominent in civil law countries but less so in common law countries, and which allows courts to deviate from black letter law. It provides them with flexibility to change the outcome of a deductive legal decision if they regard it as absurd. The principle of good faith thus empowers the judiciary to deviate. It can be used for an indefinite number of cases and might lead to almost all conceivable legal consequences. For instance, the judge can invalidate the contract, change the price, suspend or change a clause in the contract, or grant injunctive relief, compensation of damages, the disgorgement of profits or a removal claim. We argue that if the principle of good faith is used to develop contract law into an instrument for redistributing wealth in favor of poor parties, this can destroy the concept of contract as a social mechanism for generating mutual gains for parties, which might lead to unwanted economic consequences in terms of efficiency losses. We argue that the principle of good faith must be carefully and reluctantly used to reconstruct the fully specified contract and that well-informed judges, who understand the factual environment of a contract well should ask how fair bur self-interested parties would have allocated the risk in a pre-contractual situation. If the courts restrict the application of the good faith principle to these functions, this provides elasticity that otherwise would not exist if courts would strictly use the rules laid down in black letter law. Moreover, it saves transactions costs and is therefore in line with economic reasoning. We look at the most important Turkish cases and find that the Turkish Supreme Court following Continental European doctrines of good faith actually uses this principle to curb opportunistic behavior of parties and not to achieve redistribution from the rich to the poor by way of interfering into contract law.