With the curtailment of social security systems in most countries, individuals have to rely more and more on their individual savings. In particular, the well known aging of society is a problem that puts more and more pressure on the welfare state. As individuals see governmental generosity decline, it becomes vital to accrue wealth themselves, for example in order to save up for early retirement, or to overcome a spell of unemployment. Vice versa, since individuals have become more wealthy over the years, the government has the opportunity to decrease (unemployment) benefit levels, thereby also making individuals more dependent on their own resources. It is therefore of increasing importance to allow for effects of savings in (theoretical and empirical) models of the labour market. However, being one of the main strands of literature in studies of the labour market, job search models usually fail to take the savings decision into account. In a standard job search model there is no need for savings since individuals are assumed to maximize income, which implies workers to be risk neutral. If instead, as is standard in virtually all other fields in macro and microeconomics, it is assumed that risk averse individuals try to smooth consumption over their lifespan, savings do become an essential part of the job search model.
Headlines across the globe announce a threat that endangers the human population in a way that has not been seen in recent years. Millions of lives are at risk to a microscopic virus that has been haunting civilization for thousands of years. The threat now is avian influenza, a disease spread among birds. Avian influenza is classified scientifically as H5N1. This classification comes from a naming system in use since the 1980s that classifies all subtypes of influenza as HxNy. How one subtype acquires a classification will be discussed later in this compilation.
In economics and finance, the notion of liquidity is generally conceived as the ability to trade quickly a large volume with minimal price impact. In an attempt to grasp the concept more precisely, Kyle (1985) identifies three dimensions of liquidity: tightness (reflected in the bidask spread), depth (the amount of one-sided volume that can be absorbed by the market without causing a revision of the bid-ask prices), and resiliency (the speed of return to equilibrium).
In modern automated auction markets, the liquidity supply solely depends on the state of the electronic order book which consists of previously entered, non-executed limit buy and sell orders. This set of standing orders determines the price-volume relationship that a trader who requires immediacy of execution is facing. If few limit buy or sell orders are present in the system or if many orders are present but for small trade sizes only, liquidity is low and marketable limit order trades may incur considerable price impacts. For example, Harris (2002) provides a complete taxonomy of the kinds of trades that can be submitted to exchanges and their impact on market liquidity.
