The impact of the minimum wage on employment remains a controversial issue in the economics literature. Using mostly aggregate data, a certain consensus had been built around the idea that minimum wages reduce employment (see the overview by Brown, Gilroy, and Kohen 1982). This evidence was challenged in the 1990s by studies using mainly data on net employment changes at the firm level and taking advantage of the framework of quasi-experiments.
Such studies, by Card and Krueger (1994, 1995) and Katz and Krueger (1992), have launched an intense debate; this is illustrated, for example, in the Review Symposium in the Industrial and Labor Relations Review of July 1995, or by Burkhauser, Couch, and Wittenburg (2000), Card and Krueger (2000), Deere, Murphy, and Welch (1995), Dolado et al. (1996), Kennan (1995), Machin and Manning (1996), and Neumark and Wascher (2000).
In standard Arrow-Debreu economies with complete markets, idiosyncratic risk can be fully diversified away and it is irrelevant for equilibrium outcomes. But as emphasized by Townsend (1978) and Holmstrom (1979), among others, full risk diversification is costly and much theoretical research has analyzed how various forms of financial frictions can prevent it, hampering aggregate productivity, output, and capital accumulation as in, for example, Greenwood & Jovanovic (1990), Bencivenga & Smith (1991), Acemoglu & Zilibotti (1997), and Meh & Quadrini (2006). More recently Angeletos (2007) and Castro, Clementi & MacDonald (2004) have instead shown that the presence of undiversified risk can stimulate savings–because of either precautionary motives, or an increase in entrepreneurial earnings—and can foster growth.
Despite much theoretical interest, there has been little empirical analysis of the effects of idiosyncratic risk on growth. A key issue in identifying the effects of idiosyncratic risk is that the volatility of observed growth or of any other economic outcome (in brief observed risk) could be a (very) imperfect measure of the true underlying risk, which determines institutional arrangements and shapes agents’ decisions. For example principal agent models as in Holmstrom & Milgrom (1987) show that a trade off generally exists between risk-sharing benefits and provision of incentives and as a result observed risk only indirectly measures underlying risk. More recently, Aghion, Angeletos, Banerjee & Manova (2007), Thesmar & Thoenig (2000), and Thesmar & Thoenig (2004) have also stressed that observed risk is endogenous to the market structure and to the risk diversification opportunities available in the economy, since firms react to changes in the economic environment by modifying their organization structure and their innovation activities. Fischer (2008) provides experimental evidence that financial arrangements directly affect entrepreneurs’ risk taking behavior.
Almost all scenarios for the development of air traffic show that a further growth of transport capacity can be anticipated in the future. Solutions to handle the increased traffic are constrained by economical and environmental issues which may lead to quite different or even completely new aircraft configurations. In the past, it was tried to minimize the environmental impact after the configuration had already been developed mainly based on cost and performance requirements. In the future, environmental issues will have a stronger influence at the component level, but also on the arrangement of the aircraft components and thus on the configurations. Increased transport capacity can be provided by:
1. increasing the number of aircraft,
2. reducing the turn around time at the airport and separation between flights,
3. enlarging the aircraft capacity, and
4. increasing the cruise speed of aircraft.
