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  • Kosonen, Tuomas (Helsingin yliopisto, 2011)
    This thesis consists of an introduction to a topic of optimal use of taxes and government expenditure and three chapters analysing these themes more in depth. Chapter 2 analyses to what extent a given amount of subsidies affects the labour supply of parents. Municipal supplement to the Finnish home care allowance provides exogenous variation to labour supply decision of a parent. This kind of subsidy that is tied to staying at home instead of working is found to have fairly large effect on labour supply decisions of parents. Chapter 3 studies theoretically when it is optimal to provide publicly private goods. In the set up of the model government sets income taxes optimally and provides a private good, if it is beneficial to do so. The analysis results in an optimal provision rule according to which the good should be provided when it lowers the participation threshold into labour force. Chapter 4 investigates what happened to prices and demand when hairdressers value added tax was cut in Finland from 22 per cent to 8 per cent. The pass-through to prices was about half of the full pass-through and no clear indication of increased demand for the services or better employment situation in the sector is found.
  • Peltola, Soili (Helsingin yliopisto, 2014)
    In today s increasingly competitive and global economy, many claim that entrepreneurial attitudes and behavior are paramount for established firms to grow and survive. To deal with these demanding business environments, academic discussions have emphasized the status of corporate entrepreneurship (CE) as a legitimate and self-evident strategy that firms must adopt. In underscoring the hegemony of firm-level CE strategies, however, the dominant functionalist research paradigm of CE has neglected to explicate the evaluation and implementation of CE and the position of individual organizational actors as practitioners of CE within firms. The present dissertation therefore adopts a fundamentally different research approach to corporate entrepreneurship. By applying a micro social constructionist and interpretivist research paradigm, the study explores what kind of versions and practical applications of CE individual organizational actors as hired employees of their firms subjectively construct in the social context of their daily activities, and how their versions relate to theoretical conceptualizations of CE. The research material is drawn from individual interviews and meeting interaction recordings from three Finnish privately-owned business service firms in the metropolitan areas of Helsinki and Tampere during 2008-2011. The empirical designs make use of descriptive qualitative methods in generating and analyzing the research material. The present study highlights CE as a socially embedded phenomenon that does not unproblematically become grafted into practical firm operations or self-evidently fit into established organizational arrangements. The study indicates that CE is a concrete, observable phenomenon in organizations, not merely an abstract characteristic of firms or a behavioral concept that produces change and growth in isolation. Instead, CE is a process that individual organizational actors collectively bring about and shape in their everyday organizational interaction. Organizational actors jointly negotiate contextually sensitive and target-specific practical applications of CE, and establish intra- and inter-firm relationships that are necessary to sustain long-term economic behavior. However, not all negotiations necessarily lead to a uniform commitment to these applications. This dissertation further suggests that CE cannot be regarded as a permanent characteristic of firms, but is instead a process that requires continuous maintenance. The nature and practices of CE must be updated and renewed regularly as contexts and target groups in the firm s business environment change. Organizations can support the position of individual actors in actualizing these efforts through proactiveness that invites collaboration. However, institutional problems in implementing CE may emerge if top management permits internal competitive aggressiveness and the related short-term maximization of profits to undermine the ability of organizational actors to fully realize their entrepreneurial potential. This study presents a new, alternative perspective of entrepreneurship in the corporate setting by painting a context-specific, relational, and socially embedded picture of CE. Because CE is also a subtle communicative phenomenon between organizational actors and those in the market, the long-term maintenance of these relationships may critically contribute to how successfully firms are eventually able to legitimize and institutionalize CE for their benefit.
  • Miettinen, Sonja (Helsingin yliopisto, 2007)
    There is a relative absence of sociological and cultural research on how people deal with the death of a family member in the contemporary western societies. Research on this topic has been dominated by the experts of psychology, psychiatry and therapy, who mention the social context only in passing, if at all. This gives an impression that the white westerners bereavement experience is a purely psychological phenomenon, an inner journey, which follows a natural, universal path. Yet, as Tony Walter (1999) states, ignoring the influence of culture not only impoverishes the understanding of those work with bereaved people, but it also impoverishes sociology and cultural studies by excluding from their domain a key social phenomenon. This study explores the cultural dimension of grief through narratives told by fifteen of recently bereaved Finnish women. Focussing on one sex only, the study rests on the assumption of the gendered nature of bereavement experience. However, the aim of the study is not to pinpoint the gender differences in grief and mourning, but to shed light on women s ways of dealing with the loss of a loved one in a social context. Furthermore, the study focuses on a certain kind of loss: the death of an elderly parent. Due to the growth in the life expectancy rate, this has presumably become the most typical type of bereavement in contemporary, ageing societies. Most of population will face the death of a parent as they reach the middle years of the life course. The data of this study is gathered with interviews, in which the interviewees were invited to tell a narrative of their bereavement. Narrative constitutes a central concept in this study. It refers to a particular form of talk, which is organised around consequential events. But there are also other, deeper layers that have been added to this concept. Several scholars see narratives as the most important way in which we make sense of experience. Personal narratives provide rich material for mapping the interconnections between individual and culture. As a form of thought, narrative marries singular circumstances with shared expectations and understandings that are learned through participation in a specific culture (Garro & Mattingly 2000). This study attempts to capture the cultural dimension of narrative with the concept of script , which originates in cognitive science (Schank & Abelson 1977) and has recently been adopted to narratology (Herman 2002). Script refers to a data structure that informs how events usually unfold in certain situations. Scripts are used in interpreting events and representing them verbally to others. They are based on dominant forms of knowledge that vary according to time and place. The questions that were posed in this study are the following. What kind of experiences bereaved daughters narrate? What kind of cultural scripts they employ as they attempt to make sense of these experiences? How these scripts are used in their narratives? It became apparent that for the most of the daughters interviewed in this study the single most important part of the bereavement narrative was to form an account of how and why the parent died. They produced lengthy and detailed descriptions of the last stage of a parent s life in contrast with the rest of the interview. These stories took their start from a turn in the parent s physical condition, from which the dying process could in retrospect be seen to have started, and which often took place several years before the death. In addition, daughters also talked about their grief reactions and how they have adjusted to a life without the deceased parent. The ways in which the last stage of life was told reflect not only the characteristic features of late modernity but also processes of marginalisation and exclusion. Revivalist script and medical script, identified by Clive Seale as the dominant, competing models for dying well in the late modern societies, were not widely utilised in the narratives. They could only be applied in situations in which the parent had died from cancer and at somewhat younger age than the average. Death that took place in deep old age was told in a different way. The lack of positive models for narrating this kind of death was acknowledged in the study. This can be seen as a symptom of the societal devaluing of the deaths of older people and it affects also daughters accounts of their grief. Several daughters told about situations in which their loss, although subjectively experienced, was nonetheless denied by other people.
  • Anttila, Erkko (Helsingin yliopisto, 2015)
    Suburban century: Local community in the working-class suburbs of Helsinki in the twentieth century. The study discusses working-class suburbs that sprang up outside Helsinki in the early twentieth century and their change into affluent middle-class suburbs in the second half of the century. The focus of the study is on local community life and its change in the studied suburbs. Moreover, the study discusses how the suburbanites' ways of life and their relationship to their social and physical surroundings changed due to modernization in the latter half of the century. The research data consist of historical documents and personal reminiscences of residents that deal with topics such as neighbourhood life, practices of everyday life and local clubs and associations. In the first half of the twentieth century the working-class suburbs under study (e.g. Malmi, Pakila, Tapanila and Leppävaara) were fairly rural communities, which were characterized by their close-knit community life, widely practiced subsistence gardening and animal husbandry and numerous local small businesses. Another important characteristic of these suburbs was the central role played by local formal and informal organizations in solving problems of everyday life and in organizing leisure activities for local residents. This manifested itself, for example, in the form of local road maintenance associations, voluntary fire brigades and community festivals. Such practices indicated that the residents of these suburbs were in many ways functionally dependent on their local suburban community. Soon after the Second World War the way of life in the suburbs under study began to change towards a more privatized way of life. Behind this change was the growing prosperity of the post-war era, technological progress and the strengthening of extra-local networks and organizations. These factors diminished the suburban residents' dependence on local community networks and widened their horizons beyond narrow local circles. The suburbanites actively contributed to this change by lobbying state and municipal authorities to hasten the modernization of local infrastructure and public services. By the late twentieth century the working-class suburbs under study had changed into modern middle-class suburbs which were characterized by a high standard of living, a privatized way of life and the residents' dependence on extra-local networks and organizations. The local social and economic practices that were typical of the first half of the century had by now mostly disappeared. Instead, local community action now focused on maintaining the peace and quiet of the residential area. There were also aspirations to revive some aspects of the old community life. However, unlike in the local community networks of the early twentieth century, participation in these new forms of community building was entirely voluntary.
  • Uusitalo, Roope (Helsingin yliopisto, 1999)
  • Kauppinen, Antti (Helsingin yliopisto, 2008)
    The dissertation consists of four essays and a comprehensive introduction that discusses the topics, methods, and most prominent theories of philosophical moral psychology. I distinguish three main questions: What are the essential features of moral thinking? What are the psychological conditions of moral responsibility? And finally, what are the consequences of empirical facts about human nature to normative ethics? Each of the three last articles focuses on one of these issues. The first essay and part of the introduction are dedicated to methodological questions, in particular the relationship between empirical (social) psychology and philosophy. I reject recent attempts to understand the nature of morality on the basis of empirical research. One characteristic feature of moral thinking is its practical clout: if we regard an action as morally wrong, we either refrain from doing it even against our desires and interests, or else feel shame or guilt. Moral views seem to have a conceptual connection to motivation and emotions – roughly speaking, we can’t conceive of someone genuinely disapproving an action, but nonetheless doing it without any inner motivational conflict or regret. This conceptual thesis in moral psychology is called (judgment) internalism. It implies, among other things, that psychopaths cannot make moral judgments to the extent that they are incapable of corresponding motivation and emotion, even if they might say largely the words we would expect. Is internalism true? Recently, there has been an explosion of interest in so-called experimental philosophy, which is a methodological view according to which claims about conceptual truths that appeal to our intuitions should be tested by way of surveys presented to ordinary language users. One experimental result is that the majority of people are willing to grant that psychopaths make moral judgments, which challenges internalism. In the first article, ‘The Rise and Fall of Experimental Philosophy’, I argue that these results pose no real threat to internalism, since experimental philosophy is based on a too simple conception of the relationship between language use and concepts. Only the reactions of competent users in pragmatically neutral and otherwise conducive circumstances yield evidence about conceptual truths, and such robust intuitions remain inaccessible to surveys for reasons of principle. The epistemology of folk concepts must still be based on Socratic dialogue and critical reflection, whose character and authority I discuss at the end of the paper. The internal connection between moral judgment and motivation led many metaethicists in the past century to believe along Humean lines that judgment itself consists in a pro-attitude rather than a belief. This expressivist view, as it is called these days, has far-reaching consequences in metaethics. In the second essay I argue that perhaps the most sophisticated form of contemporary expressivism, Allan Gibbard’s norm-expressivism, according to which moral judgments are decisions or contingency plans, is implausible from the perspective of the theory of action. In certain circumstances it is possible to think that something is morally required of one without deciding to do so. Morality is not a matter of the will. Instead, I sketch on the basis of Robert Brandom’s inferentialist semantics a weak form of judgment internalism, according to which the content of moral judgment is determined by a commitment to a particular kind of practical reasoning. The last two essays in the dissertation emphasize the role of mutual recognition in the development and maintenance of responsible and autonomous moral agency. I defend a compatibilist view of autonomy, according to which agents who are unable to recognize right and wrong or act accordingly are not responsible for their actions – it is not fair to praise or blame them, since they lacked the relevant capacity to do otherwise. Conversely, autonomy demands an ability to recognize reasons and act on them. But as a long tradition in German moral philosophy whose best-known contemporary representative is Axel Honneth has it, both being aware of reasons and acting on them requires also the right sort of higher-order attitudes toward the self. Without self-respect and self-confidence we remain at the mercy of external pressures, even if we have the necessary normative competence. These attitudes toward the self, in turn, are formed through mutual recognition – we value ourselves when those who we value value us. Thus, standing in the right sort of relations of recognition is indirectly necessary for autonomy and moral responsibility. Recognition and valuing are concretely manifest in actions and institutions, whose practices make possible participation on an equal footing. Seeing this opens the way for a kind of normative social criticism that is grounded in the value of freedom and automomy, but is not limited to defending negative rights. It thus offers a new way to bridge the gap between liberalism and communitarianism.
  • Khan, Md Anichul Hoque (Helsingin yliopisto, 2009)
    This thesis aims at finding the role of deposit insurance scheme and central bank (CB) in keeping the banking system safe. The thesis also studies the factors associated with long-lasting banking crises. The first essay analyzes the effect of using explicit deposit insurance scheme (EDIS), instead of using implicit deposit insurance scheme (IDIS), on banking crises. The panel data for the period of 1980-2003 includes all countries for which the data on EDIS or IDIS exist. 70% of the countries in the sample are less developed countries (LDCs). About 55% of the countries adopting EDIS also come from LDCs. The major finding is that the using of EDIS increases the crisis probability at a strong significance level. This probability is greater if the EDIS is inefficiently designed allowing higher scope of moral hazard problem. Specifically, the probability is greater if the EDIS provides higher coverage to deposits and if it is less powerful from the legal point of view. This study also finds that the less developed a country is to handle EDIS, the higher the chance of banking crisis. Once the underdevelopment of an economy handling the EDIS is controlled, the EDIS separately is no longer a significant factor of banking crises. The second essay aims at determining whether a country s powerful CB can lessen the instability of the banking sector by minimizing the likelihood of a banking crisis. The data used include indicators of the CB s autonomy for a set of countries over the period of 1980-89. The study finds that in aggregate a more powerful CB lessens the probability of banking crisis. When the CB s authority is disentangled with respect to its responsibilities, the study finds that the longer tenure of CB s chief executive officer and the greater power of CB in assigning interest rate on government loans are necessary for reducing the probability of banking crisis. The study also finds that the probability of crisis reduces more if an autonomous CB can perform its duties in a country with stronger law and order tradition. The costs of long-lasting banking crises are high because both the depositors and the investors lose confidence in the banking system. For a rapid recovery of a crisis, the government very often undertakes one or more crisis resolution policy (CRP) measures. The third essay examines the CRP and other explanatory variables correlated with the durations of banking crises. The major finding is that the CRP measure allowing the regulation forbearance to keep the insolvent banks operative and the public debt relief program are respectively strongly and weakly significant to increase the durations of crises. Some other explanatory variables, which were found by previous studies to be related with the probability of crises to occur, are also correlated with the durations of crises.
  • Holopainen, Helena (Helsingin yliopisto, 2007)
    This dissertation consists of an introductory section and three theoretical essays analyzing the interaction of corporate governance and restructuring. The essays adopt an incomplete contracts approach and analyze the role of different institutional designs to facilitate the alignment of the objectives of shareholders and management (or employees) over the magnitude of corporate restructuring. The first essay analyzes how a firm's choice of production technology affects the employees' human capital investment. In the essay, the owners of the firm can choose between a specific and a general technology that both require a costly human capital investment by the employees. The specific technology is initially superior in using the human capital of employees but, in contrast to the general technology, it is not compatible with future innovations. As a result, anticipated changes in the specific technology diminish the ex ante incentives of the employees to invest in human capital unless the shareholders grant the employees specific governance mechanisms (a right of veto, severance pay) so as to protect their investments. The results of the first essay indicate that the level of protection that the shareholders are willing to offer falls short of the socially desirable one. Furthermore, when restructuring opportunities become more abundant, it becomes more attractive both socially and from the viewpoint of the shareholders to initially adopt the general technology. The second essay analyzes how the allocation of authority within the firm interacts with the owners' choice of business strategy when the ability of the owners to monitor the project proposals of the management is biased in favor of the status quo strategy. The essay shows that a bias in the monitoring ability will affect not only the allocation of authority within the firm but also the choice of business strategy. Especially, when delegation has positive managerial incentive effects, delegation turns out to be more attractive under the new business strategy because the improved managerial incentives are a way for the owners to compensate their own reduced information gathering ability. This effect, however, simultaneously makes the owners hesitant to switch the strategy since it would involve a more frequent loss of control over the project choice. Consequently, the owners' lack of knowledge of the new business strategy may lead to a suboptimal choice of strategy. The third essay analyzes the implications of CEO succession process for the ideal board structure. In this essay, the presence of the departing CEO on the board facilitates the ability of the board to find a matching successor and to counsel him. However, the ex-CEO's presence may simultaneously also weaken the ability of the board to restructure since the predecessor may use the opportunity to distort the successor's project choice. The results of the essay suggest that the extent of restructuring gains, the firm's ability to hire good outside directors and the importance of board's advisory role affect at which point and for how long the shareholders may want to nominate the predecessor to the board.
  • Peura, Samu (Helsingin yliopisto, 2003)
  • Riihimäki, Elisa (Helsingin yliopisto, 2009)
    This dissertation consists of an introductory section and three essays investigating the effects of economic integration on labour demand by using theoretical models and by empirical analysis. The essays adopt an intra-industry trade approach to specify a theoretical framework of estimation for determining the effects of economic integration on employment. In all the essays the empirical aim is to explore the labour demand consequences of European integration. The first essay analyzes how labour-demand elasticities with own price have changed during the process of economic integration. As a theoretical result, intensified trade competition increases labour-demand elasticity, whereas better advantage of economies of scale decreases labour-demand elasticity by decreasing the elasticity of substitution between differentiated products. Furthermore, if integration gives rise to an increase in input-substitutability and/or outsourcing activities, labour demand will become more elastic. Using data from the manufacturing sector from 1975 to 2002, the empirical results provide support for the hypothesis that European integration has contributed to increased elasticities of total labour demand in Finland. The second essay analyzes how economic integration affects the impact of welfare poli-cies on employment. The essay considers the viability of financing the public sector, i.e. public consumption and social security expenses, by general labour taxation in an economy which has become more integrated into international product markets. The theoretical results of the second essay indicate that, as increased trade competition crowds out better economies of scale, it becomes more costly to maintain welfare systems financed by labour taxation. Using data from European countries for the years 1975 to 2004, the empirical results provide inconsistent evidence for the hypothesis that economic integration has contributed to the distortion effects of welfare policies on employment. The third essay analyzes the impact of profit sharing on employment as a way to introduce wage flexibility into the process of economic integration. The results of the essay suggest that, in theory, the effects of economic integration on the impact of profit sharing on employment clearly depend on a trade-off between intensified competition and better advantage of economies of scale. If product market competition increases, the ability of profit sharing to improve employment through economic integration increases with moderated wages. While, the economic integration associating with market power in turn decrease the possibilities of profit sharing with higher wages to improve employment. Using data from the manufacturing sector for the years 1996 to 2004, the empirical results show that profit-sharing has a positive impact on employment during the process of European integration, but can have ambiguous effects on the stability of employment in Finland.
  • Mälkönen, Ville (Helsingin yliopisto, 2004)
  • Lombardini-Riipinen, Chiara (Helsingin yliopisto, 2002)
  • Lof, Matthijs (Helsingin yliopisto, 2013)
    The way in which market participants form expectations affects the dynamic properties of financial asset prices and therefore the appropriateness of different econometric tools used for empirical asset pricing. In addition to standard rational expectations models, this thesis studies a class of models in which boundedly rational agents may switch between various simple expectation rules. A well-known specific example features fundamentalists, who target the fundamental value of the asset, and chartists, who try to exploit recent trends in price movements. A crucial feature of these models is that not all agents have to follow the same expectation rule, but are allowed to form heterogeneous beliefs. Chapters 2 and 3 present empirical estimations of two specific heterogeneous agent models. Since the data generating processes are assumed to be nonlinear, due to the agents' switching between expectation rules, nonlinear regression models are applied. By framing the empirical results in a heterogeneous agent framework, these chapters provide an alternative view on important topics in asset pricing, such as the prevalence of excess volatility and the relation between financial markets and the macro-economy. The final two chapters deal with noncausal, or forward-looking, autoregressive models. Chapter 4 shows that US stock prices are better described by noncausal autoregressions than by their causal counterparts. This implies that agents' expectations are not revealed to an outside observer such as an econometrician observing only realized market data. Simulation results show that heterogeneous agent models are able to generate noncausal asset prices. Chapter 5 considers the estimation of a class of standard rational expectations models. It is shown that noncausality of the instrumental variables does not have an impact on the consistency of the generalized method of moments (GMM) estimator, as long as agents form rational expectations.
  • Toppinen, Teemu (Helsingin yliopisto, 2014)
    This dissertation consists of five articles plus an introductory essay, the overarching goal being that of defending an expressivist view about normative thought and talk. According to expressivism, the meaning of normative sentences (e.g. 'We ought to cut down on our greenhouse gas emissions,' 'There is more to good life than enjoyment') is to be explained by their expressing broadly practical, 'desire-like,' states of mind, rather than by what they are about, or by their truth-conditions. To think that eating factory farmed meat is wrong is, then, to be in the relevant practical state to disapprove of eating factory farmed meat, say. The prevalent rival view, according to which the meaning of normative sentences and the nature of normative thought should rather be explained with reference to the way they represent the world to be, is often called 'cognitivism.' Understanding the nature and meaning of normative judgment is important if we are to make sense, for example, of the way in which the demands of morality may be objective, or of the nature of ethical disagreement. However, philosophers are increasingly finding analogous issues to be of interest also to debates in epistemology and philosophy of language and mind due to the possibility that concepts such as knowledge, evidence, meaning, and belief are "fraught with ought," that is, normative concepts of sorts. Expressivism is commonly agreed to be attractive thanks to its making sense of the distinctive features of normativity and normative thought e.g. its practical function, and the resistance of normative properties and claims to reductive analysis in naturalistic terms within a broadly naturalistic understanding of the world. But of course this view faces a number of big challenges. The introductory essay offers a brief overview of what metaethics is all about and, in particular, of the widely acknowledged successes and problems of expressivism and its competitors. (A very brief exploration of what may be some of the historical roots of expressivism is also included.) In Essay 1, "Believing in Expressivism," I outline a form of expressivism which I call the higher-order state view. According to ecumenical expressivism, defended e.g. by Michael Ridge, normative sentences express complex states consisting of certain desire-like states and descriptive beliefs. On the higher-order state view, normative sentences rather express higher-order states of having some appropriately related desires and beliefs. I argue that the higher-order state view can exploit the resources that ecumenical expressivism is sometimes supposed to have for dealing with the so-called Frege-Geach problem, and yet avoid the problems associated with the ecumenical view regarding validity, expression relation, and disagreement. In Essay 2, "Expressivism and the Normativity of Attitudes," I defend the idea that expressivism is compatible with (NA), which says that claims about propositional attitudes (such as expressivism itself) are themselves normative judgments. I also suggest that in order for this to be true, James Dreier's influential response to the problem of creeping minimalism must be slightly revised. In Essay 3, "Moral Fetishism Revisited," I defend the 'moral fetishism' argument against motivational externalism, originally presented by Michael Smith. I argue that only the internalist views on the relation of moral judgment and motivation to some of which expressivists plausibly are committed can combine two attractive theses: first, that the morally admirable are motivated to act on the reasons they take to ground actions' being right, and second, that their virtuousness need not be diminished by their acting on their thinking that performing some action would be the right thing to do. In Essay 4, "Pure Expressivism and Motivational Internalism," I examine the prospects of pure expressivism (the view that some normative sentences express only desire-like states) with regard to capturing the truth of an internalist thesis, (PRACTICALITY), which says that, necessarily, if one judges that φ-ing would be desirable, then, if one is rational, one is thereby also motivated to φ. I argue that some forms of pure expressivism explain (PRACTICALITY) neatly, while others fail and should thereby be rejected. In Essay 5, "Goading or Guiding? Cognitivism, Non-cognitivism, and Practical Reasoning," I develop a challenge for all stripes of cognitivists, and identify a reason for preferring expressivism over cognitivism. One of my main goals here is to introduce the idea that a metaethical theory of the nature of normative judgment must be compatible with a plausible account of the reasons for which we act when we act on the basis of our normative judgments. Another main goal of the paper is to argue that when we try to satisfy this desideratum for a metaethical theory, we notice that cognitivism faces a challenge that at least some forms of expressivism elegantly sidestep. If cognitivism is true, then it is hard to explain how someone could perform an action, φ, on the basis of her judgment that she ought to φ, and thereby for the reasons that one might sensibly take to explain why she ought to φ. If we accept expressivism or, more precisely, either the ecumenical or the higher-order state view no similar problem arises.
  • Turunen, Harri (Helsingin yliopisto, 2015)
    I study the importance of variation in the higher moments of macroeconomic and financial quantities. The first essay considers the effects of uncertainty on the fiscal multiplier when the economy has hit the zero lower bound (ZLB) on the nominal rate in a relatively standard New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. As the ZLB is a very strong form of nonlinearity, the model is solved using a numerical method. Uncertainty in government spending and productivity are modeled as stochastic volatility. Confirming previous research (e.g. Christiano, Eichenbaum and Rebelo, 2011), the multiplier is found to be higher when at the bound, and the effects of volatility shocks are found to be noticeable (e.g. Basu and Bundick, 2015). Uncertainty is found to have an impact on the multiplier: when future spending is uncertain, the multiplier is high, but when future productivity is uncertain, the multiplier is low. The second essay studies whether or not DSGEs are able to generate simulated realizations with realistic third and fourth moments. Many time series in macroeconomics and finance exhibit either excess kurtosis or skewness or both. However, as was shown by Ascari et al (2013), standard DSGEs such as the neoclassical growth model or the model of Smets and Wouters (2007) are unable to produce realizations with reasonable moments, regardless of shock distribution or the order of the Taylor approximation applied. My results however indicate that this is mostly due to lack of nonlinearity in the models, since especially a model with a very strong form of nonlinearity, such as the ZLB, is able to generate non-Gaussian realizations. The third essay considers the pricing of macroeconomic risk. The theory of Merton (1973) implies that there can be other sources of priced risk than the risk associated with the return on the market portfolio and that an appropriate measure for sensitivity of a stock to this risk is the covariance of the return of that stock with the source of that risk. I apply the multivariate volatility model of Engle (2002) to estimate time-varying covariances of US stock portfolios with a variety of US macro time series. The finding is that inflation and unemployment are priced in the market and earn a negative premium, while the growth rate of industrial production and the Case-Shiller house price index are not priced.
  • Pääkkönen, Jenni (Helsingin yliopisto, 2009)
    In public economics, two extremist views on the functions of a government compete: one emphasizes government working for the public interest to provide value for the citizens, while another regards government mainly as a workhorse for private interests. Moreover, as the sole legitimate authority, the government has the right to define the rules and laws as well as to enforce them. With respect to regulation, two extremes arise: from too little regulation to too much of it. If the government does not function or ceases to exist, the state falls into anarchy or chaos (Somalia). If it regulates too much, it will completely suffocate private activities, which might be considered extralegal (the former Soviet Union). In this thesis I scrutinize the government s interventionist policies and evaluate the question of how to best promote economic well-being. The first two essays assume that the government s policies promote illegal activity. The first paper evaluates the interaction between the government and the mafia, and pays attention to the law enforcement of underground production. We show that the revenue-maximizing government will always monitor the shadow economy, as monitoring contributes to the government s revenue. In general, both legal and illegal firms are hurt by the entry of the mafia. It is, however, plausible that legal firms might benefit by the entry of the mafia if it competes with the government. The second paper tackles the issue of the measurement of the size of the shadow economy. To formulate policies it is essential to know what drives illegal economic activity; is it the tax burden, excess regulation, corruption or a weak legal environment? In this paper we propose an additional explanation for tax evasion and shadow production, namely cultural factors as manifested by religion as determinants of tax morality. According to our findings, Catholic and Protestant countries do not differ in their tax morale. The third paper contributes to the literature discussing the role of the government in promoting economic and productivity growth. Our main result is that, given the complex relationship between economic growth and economic freedom, marketization has not necessarily been beneficial in terms of growth. The last paper builds on traditional growth literature and revisits the debate on convergence clubs arising from demographic transition. We provide new evidence against the idea that countries within a club would converge over time. Instead, we propose that since the demographic transition is a dynamic process, one can expect countries to enter the last regime of stable, modern growth in stages.
  • Vanhala, Juuso (Helsingin yliopisto, 2007)
    The dissertation consists of an introductory chapter and three essays that apply search-matching theory to study the interaction of labor market frictions, technological change and macroeconomic fluctuations. The first essay studies the impact of capital-embodied growth on equilibrium unemployment by extending a vintage capital/search model to incorporate vintage human capital. In addition to the capital obsolescence (or creative destruction) effect that tends to raise unemployment, vintage human capital introduces a skill obsolescence effect of faster growth that has the opposite sign. Faster skill obsolescence reduces the value of unemployment, hence wages and leads to more job creation and less job destruction, unambiguously reducing unemployment. The second essay studies the effect of skill biased technological change on skill mismatch and the allocation of workers and firms in the labor market. By allowing workers to invest in education, we extend a matching model with two-sided heterogeneity to incorporate an endogenous distribution of high and low skill workers. We consider various possibilities for the cost of acquiring skills and show that while unemployment increases in most scenarios, the effect on the distribution of vacancy and worker types varies according to the structure of skill costs. When the model is extended to incorporate endogenous labor market participation, we show that the unemployment rate becomes less informative of the state of the labor market as the participation margin absorbs employment effects. The third essay studies the effects of labor taxes on equilibrium labor market outcomes and macroeconomic dynamics in a New Keynesian model with matching frictions. Three policy instruments are considered: a marginal tax and a tax subsidy to produce tax progression schemes, and a replacement ratio to account for variability in outside options. In equilibrium, the marginal tax rate and replacement ratio dampen economic activity whereas tax subsidies boost the economy. The marginal tax rate and replacement ratio amplify shock responses whereas employment subsidies weaken them. The tax instruments affect the degree to which the wage absorbs shocks. We show that increasing tax progression when taxation is initially progressive is harmful for steady state employment and output, and amplifies the sensitivity of macroeconomic variables to shocks. When taxation is initially proportional, increasing progression is beneficial for output and employment and dampens shock responses.
  • Korkeamäki, Ossi (Government Institute for Economic Research, 2012)
    The first essay in this thesis is on gender wage differentials among manufacturing sector white-collar workers. The wage differential is decomposed into firm, job (within-firm) and individ-ual-level components. Job-level gender segregation explains over half of the gap, while firm-level segregation is not important. After controlling for firm, job and individual characteristics, the remaining unexplained wage cap to the advantage of men is six per cent of men s mean wage. In the second essay, I study how the business cycle and gender affect the distribution of the earnings losses of displaced workers. The negative effect of displacement is large, persistent and strongest in the lowest earnings deciles. The effect is larger in a recession than in a recov-ery period, and in all periods women s earnings drop more than men s earnings. The third essay shows that the transition from steady employment to disability pension de-pends on the stringency of medical screening and the degree of experience-rating of pension costs applied to the employer. The fact that firms have to bear part of the cost of employees disability pension costs lowers both the incidence of long sick leave periods and the probabil-ity that sick leave ends in a disability pension. The fourth and fifth essays are studies on the employment, wage and profit effects of a re-gional payroll tax cut experiment conducted in northern and eastern Finland. The results show no statistically significant effect on any of the response variables.
  • Hämäläinen, Saara (Helsingin yliopisto, 2015)
    Our thesis has three individual papers and an introduction. It contributes to dynamic price and search theory. The first paper deals with the classic problem of trading under asymmetric information. The other two analyze retailing strategies that help lock in buyers by creating in-store frictions. In the first paper, we investigate welfare and equilibrium trading in a decentralized search market with asymmetric information and bilateral communication opportunities. Sellers and buyers meet randomly and pairwise and view a shared signal of the seller's quality. In the following signaling game, the sellers can either rely on this costless signal (pool) or costly signaling (separate). We observe that, although the average market quality is high, additional information is not generally welfare improving. All equilibria are inefficient. Contrary to the usual tradeoff between price and liquidity, we find that the signals can help sustaining stationary Markovian equilibria where higher quality is traded faster. In the second paper, we construct a novel search model that features in-store frictions and equilibrium price dispersion both within and across stores. The frictions originate from the gradual arrival of price information within stores and the existence of deadlines for buyers. We show that sellers have an incentive carry several similar items and generate price variation among these items to amplify the existing search frictions and create barriers to switching in an environment where none exist initially. It also helps them to discriminate better between buyers, who end with diverse degrees of price information. As the number of items in stock expands, sellers can extract more profits. In our third paper, we develop a price search model that features endogenous frictions in a duopolistic environment. These frictions originate from the gradual arrival or price information within stores and the existence of deadlines for buyers. We show that both sellers have a strategic incentive to generate frictions. There exists exactly two equilibria with a unique asymmetric pattern: a prominent seller, whose expected price is higher but the in-store frictions lower, and a non-prominent seller. The buyers are divided exactly equally into informed and uninformed consumers, and into those who fail to find anything. Under the Poisson process, this surplus loss is about 6 %.
  • Seppälä, Timo (Helsingin yliopisto, 2008)
    The dissertation consists of three essays on misplanning wealth and health accumulation. The conventional economics assumes that individual's intertemporal preferences are exponential (exponential preferences, EP). Recent findings in behavioural economics have shown that, actually, people do discount near future relatively heavier than distant future. This implies hyperbolic intertemporal preferences (HP). Essays I and II concentrate especially on the effects of a delayed completion of tasks, a feature of behaviour that HP enables. Essay III uses current Finnish data to analyse the evolvement of the quality adjusted life years (QALYs) and inconsistencies in measuring that. Essay I studies the existence effects of a lucrative retirement savings program (SP) on the retirement savings of different individual types having HP. If the individual does not know that he will have HP also in the future, i.e. he is the naïve, for certain conditions, he delays the enrolment on SP until he abandons it. Very interesting finding is that the naïve retires then poorer in the presence than in the absence of SP. For the same conditions, the individual who knows that he will have HP also in the future, i.e. he is the sophisticated, gains from the existence of SP, and retires with greater retirement savings in the presence than in the absence of SP. Finally, capabilities to learn from past behaviour and about intertemporal preferences improve possibilities to gain from the existence but an adequate time to learn must be then guaranteed. Essay II studies delayed doctor's visits, theirs effects on the costs of a public health care system and government's attempts to control patient behaviour and fund the system. The controlling devices are a consultation fee and a deductible for that. The deductible is effective only for a patient whose diagnosis reveals a disease that would not get cured without the doctor's visit. The naives delay their visits the longest while EP-patients are the quickest visitors. To control the naives, the government should implement a low fee and a high deductible, while for the sophisticates the opposite is true. Finally, if all the types exist in an economy then using an incorrect conventional assumption that all individuals have EP leads to worse situation and requires higher tax rates than assuming incorrectly but unconventionally that only the naives exists. Essay III studies the development of QALYs in Finland 1995/96-2004. The essay concentrates on developing a consistent measure, i.e. independent of discounting, for measuring the age and gender specific QALY-changes and their incidences. For the given time interval, use of a relative change out of an attainable change seems to be almost intact to discounting and reveals that the greatest gains are for older age groups.