Uncertainty and optimal stabilization policy

The impact of uncertainty on optimal stabilization policies is examined in the context of a simple reduced form model. The major finding of the paper is that, in the presence of instrument costs, the dynamic effects of uncertainty can induce an optimal stochastic policy which is more vigorous than the optimal deterministic policy. This result contrasts with the well-known conclusion for static models that uncertainty typically generates optimal responses equally or less intense than deterministic ones.     

Corporate governance and elites

Using a qualitative methodology (interviews), we examine the relationship between the effectiveness of corporate governance mechanisms and elitist interventions. In doing this, we identify three elitist groups – political, cultural and religious, and investigate how they shape the legitimacy and effectiveness (or otherwise) of the institutional drivers of corporate governance in Nigeria. We caution the widely-held notion in the literature which suggests that institutions act as a check on the behaviour of elites and influence how elites compete and emerge. Alternatively, we argue that elites, in the presence of institutional voids, can invent, circumvent and corrupt institutions.     

The Interplay among Financial Regulations,Resilience, and Growth

Interconnectedness has been an important source of market failures, leading to the recent financial crisis. Large financial institutions tend to have similar exposures and thus exert externalities on each other through various mechanisms. Regulators have responded by putting in place more regulations with many layers of regulatory complexity, leading to ambiguity and market manipulation. Mispricing risk in complex models and the arbitrage opportunities through the regulatory loopholes have provided incentives for certain activities to be more concentrated in the regulated entities and for other activities to leave the banking into new shadow banking areas. How can we design an effective regulatory framework that would perfectly rule out bank runs and TBTF and to do so without introducing incentives for financial firms to take excessive risk? It is important for financial regulations to be coordinated across regulatory entities and jurisdictions and for financial regulations to be forward looking, rather than aiming to address problems of the past.     

Key Factors that Influence Consumer Preferences for Natural-Hyped Products

Natural-hyped products are receiving greater attention from and acceptance by consumers worldwide. Environmental factors that foster the demand for natural-hyped products, specifically hemp-based products include the deregulation of the cannabis industry and greater consumer desire for natural foods. Adding to this, the strategic use of stimulant type of cues (e.g., a cannabis leaf) included in product logos, ads, and packaging, seems to create hype associations when evaluating hemp-based products. In this context, this study presents empirical evidence (three experiments and two qualitative studies) that illustrates consumer preference for hemp-based products over ones that do not include hemp as an ingredient (hemp-free). The research focuses on identifying the psychological determinant that orients consumers towards hemp-based products. Findings suggest that the perceived naturalness is the psychological mechanism behind consumers positive evaluation of hemp-based products. Moreover, this study presents evidence that this evaluation is enhanced by the consumer's need for stimulation. Implications of the findings for the role of perceived naturalness and the need for stimulation in marketing strategies are discussed.