We use data from the Canadian 2-year longitudinal Labour Market Activity Survey of 1986-87 to estimate the effect of the Unemployment Insurance (UI) system on job duration. Particular attention is focused on the "entrance requirements" of the UI system, which relate eligibility for UI benefits to an individual's recent employment history. The article makes operational the UI entrance requirement provisions which take into account variations in the regional unemployment rate. Controlling for many personal and job characteristics, we find evidence that a significant number of jobs terminate when they have reached the duration that would permit a UI claim.

I. Introduction, 303.—II. Model and comparative static properties, 306.—III. The influence of market power on equilibrium per unit discretionary expenditures, 312.—IV. Concluding remarks, 314.—Mathematical appendix, 315.

The Galbraith-Caves conjecture that ".. a significant portion of the potential profits in... (a firm's)... position of market power is taken in the form of avoiding uncertainty " [Caves, 1970, p. 284] has recently received theoretical and empirical attention in an important paper by Edwards and Heggestad [19731—henceforth referred to as EH. Following Lintner [1970] and others, EH assume that price-setting firms maximize the expected utility of profits. A specific utility function, (1) U(11) = a — be-2"f 1, is employed, where a and b are constants and 2a is the coefficient of absolute risk aversion. Assuming further that Fr oi), maxi-mizing expected utility can be shown to be equivalent to maximizing the certainty equivalent (2) = — «air. The expression for the firm's expected utility, or equivalently II, yields indifference curves in H space that are linear with a positive slope equal to lia. Market opportunities open to the firm are contained in the "efficient opportunity set, " a notion borrowed from the theory of finance [Edwards and Heggestad, 1973, p. 461]. Preferences and opportunities are brought together in Figure I, which constitutes the crux of EH's theoretical analysis. In addition to determining the firm's optimal II, a 2 „ configuration, e.g., points X and Y, the diagram is used to show that (i) higher risk aversion (a condition that is thought to characterize the management of firms with market power) 1 or (ii) a uniform, rightward, shift of the efficient opportunity set (firms with greater market power are thought to be able to extract _ more expected profit for any given variance of profit) will lower o-2,r/II, the EH measure of risk undertaken by firms. The We are indebted to F. R. Edwards, J. Green, A. A. Heggestad, and C. Southey for helpful comments on an earlier draft. 1. For a discussion of this proposition, the reader is referred to, among others,

Trading in currencies in order to obtain the best possible exchange rate is known as arbitrage and can broadly be divided into three categories:1) Space Arbitrage––transactions to take advantage of discrepancies between rates quoted at the same time in different markets.2) Time Arbitrage––transactions to take advantage of discrepancies between forward margins for different maturities.3) Interest Arbitrage––transactions to take advantage of discrepancies between yield on short-term investments in different currencies. This form of arbitrage can be split into (a) Covered and (b) Uncovered (speculative) interest arbitrage. The former variety uses today's forward rate for forward conversion back into our holding currency; the latter allows the dealer to use the spot rate existing in the future.

Louis N. Christofides, Robert Swidinsky, David A. Wilton, A Microeconometric Analysis of Spillovers within the Canadian Wage Determination Process, The Review of Economics and Statistics, Vol. 62, No. 2 (May, 1980), pp. 213-221

The microeconomic forces that influence real wages are not fully understood. This paper studies pay determination using data on approximately 600 labor contracts. It finds that the real wage is an increasing function of past profitability in the employer's industry, and a decreasing function of the level of unemployment in the employer's region. These results are consistent with rent-sharing theories.