There is a large economics literature on individual and economy-wide productivity. There is also a fast-growing one on the measurement of individuals’ mental well-being. Yet economists know little about the interplay between emotions and human productivity. Although people’s happiness and effort decisions seem likely to be deeply intertwined, we lack evidence on whether, and how, they are causally connected.
This paper seeks to make two contributions. First, it attempts to alert economists to a psychology literature in which happiness (or more precisely what psychologists describe as positive affect) has been shown to be associated with higher human performance. Here the work of the psychologist Alice Isen has been particularly important. The second contribution of the paper is to design and perform an empirical inquiry that has not been done in the psychology literature. It addresses a question of particular interest to economists (and perhaps to policy-makers). Does happiness make people more productive in a paid task? We provide evidence in a standardized piece rate setting with otherwise fairly well-understood properties that it does.
Cost of borrowing for corporations changes with changing credit market conditions. For example, tightening credit market conditions would result in an increase in the cost of borrowing for most firms in the economy. Imperfect capital market theories predict that the change in the cost of borrowing due to changing credit market conditions would be different for firms with different characteristics.
For example, the cost of borrowing for firms with high probability of default should increase more with tightening credit markets than the cost of borrowing for firms with low probability of default. Further more, the effect of credit market conditions on cost of borrowing for firms with different characteristics might vary over the business cycle. Firms with high probability of default might become even more financially distressed in economic recessions resulting in a higher increase in the cost of borrowing with respect to firms with low probability of default.
Uneven economic growth and social development persist both at national and supranational levels. The cumulative effects of these disparities on capital mobility, price flexibility and voluntary interregional migration have been studied extensively. Yet, the issue of how international income disparities influence the evolution of language heterogeneity in sub-national labour markets remains understudied.
Voluntary labour migration among local markets in Central and Eastern Europe becomes an increasingly important issue for analysis, as in this region language borders cross over state borders. Over the last fifteen years these countries have undergone significantly different transitional paths leading to increasing differentials in economic growth and social development. The result is that migration pressures among these countries have strengthened. What is specific to this new pattern of migration is the language dimension, due to the fact that language borders cross over state borders.
