News Management in Monetary Policy: When Central Banks Should Talk to the Government

Central banks are often considered to be better informed about the present or future state of the economy than the government. A conservative central bank has an incentive to exploit this asymmetry by strategically managing its information policy. Strategic news management will keep the government uncertain about the state of the economy and increase the central bank's leeway for conducting a conservative monetary policy. We show that withholding information from the government is an equilibrium. However, there are also well-defined limits to strategic information policy as the central bank has to distort monetary policy to be in line with its news management. A simple extension of our findings is that, if the government on occasion learns about the bank's true information, it will then overrule the central bank's decision on monetary policy.     

Optimal pension insurance design

In this paper we analyze how the traditional life and pension contracts with a guaranteed rate of return can be optimized to increase customers’ welfare. Given that the contracts have to be priced correctly, we use individuals’ preferences to find the preferred design. Assuming CRRA utility, we cannot explain the existence of any form of guarantees. Through numerical solutions we quantify the difference (measured in certainty equivalents) to the preferred Merton solution of direct investments in a fixed proportion of risky and risk free assets. The largest welfare loss seems to come from the fact that guarantees are effective by the end of each year, not only by the expiry of the contract. However, the demand for products with guarantees may be explained through behavioral models. We use cumulative prospect theory as an example, showing that the optimal design is a simple contract with a life-time guarantee and no default option.     

On the role of market insurance in a dynamic model

Durables like cars or houses are a substantial component in the balance sheets of households. These durables are exposed to risk and can be insured in the market. We build a dynamic model in which agents have three possibilities to cope with the risk exposure of the durable stock: (i) purchase of market insurance, (ii) buffer-stock saving of the riskless asset or (iii) adjustment of the durable stock. We calibrate our model to the US economy and find a small role for market insurance.

Workplace Bullying,Psychological Perspectives and Industrial Relations: Towards a Contextualized and Interdisciplinary Approach

Workplace bullying is increasingly recognized as an important area of debate, particularly among researchers adopting a psychological perspective of work. This paper examines definitions of workplace bullying and explores less orthodox approaches within a British context. It focuses primarily on managers as perpetrators, and comments on the ‘bullying organization’, the relevance of human resource management and of gender. Context, the workplace balance of power, workers’ collective resistance and trade unions are then emphasized as significant factors and the potential for developing a contextualized, politicized and interdisciplinary approach to workplace bullying is suggested. Links with mobilization theory are explored, and the issue is also examined within the UK public sector environment.     

The effects of development aid on exports

Of what benefit cooperation with developing countries is in actual fact to the industrialized countries is a question which is receiving increasing attention in the discussions on development policy. In the present economic situation special interest attaches in this context of course to the repercussions of public development aid services on the export activities of enterprises in the donor countries. The following article is based on the findings of a study into “Job procurement through development aid credits and exports to developing countries“ (Arbeitsplatzsicherung durch Entwicklungshilfekredite und Exporte in Entwicklungsländer, Basle 1978) which was undertaken by the author together with Christel Bergmann on behalf of the Federal Ministry for Economic Cooperation.     

On the origin of domestic and international terrorism

We analyze the determinants of the origin of domestic and international terrorism in a large panel data set of 159 countries spanning from 1970 to 2007. We show that terror increases with GDP per capita, a higher polity score measuring a more open and competitive political system and experiences of domestic conflict, anarchy and regime transitions. Our evidence thus contradicts the notion that terrorism is rooted in economic deprivation or that strongly autocratic regimes breed more terrorists. Rather we show that weak or failing states are an incubator for terrorism. We also show that the causes of domestic terror and international terror are similar.     

The impact of boundaryless careers on organizational decision making: an analysis from the perspective of Luhmann's theory of social systems

Research on careers has recently discovered the growing relevance of inter-organizational, boundaryless careers. The new paradigm of career studies that goes hand in hand with the concept of boundaryless careers, though, has not yet paid very much attention to the impact of new career patterns on how organizations function. To fill this gap, the paper analyses the effects of boundaryless careers on organizational decision making. Drawing on Niklas Luhmann's theory of social systems, we elaborate how observing a (potential) employee's life in terms of career generally facilitates organizational decision making by what we call the evaluative capacity of career. Further, the paper shows in what respect employing this mode of observation is rendered more difficult by the emergence of boundaryless careers. Based on the theoretical framework developed, we finally deduce and apply a scheme of classification of possible reactions to the organizational problems caused by boundaryless careers. In sum, the paper provides a new theoretical approach to analysing different ways of how organizations can cope with the challenges of new career patterns.     

The role of task-related antecedents for the development of turnover intentions in temporary project teams

Abstract

High turnover can cause serious problems in organizations. Yet, previous research confirmed that HRM practices are useful to influence the development of turnover intentions. Existing studies have revealed a variety of factors that drive individuals to leave permanent organizations (POs) but almost no research has considered turnover in temporary organizations (TOs). Yet, TOs, such as project teams, have become increasingly prevalent and exhibit several characteristics that are distinct from POs. Hence, the antecedents of turnover intentions in TOs may also differ from those in POs. However, empirical evidence for this proposition is still lacking. In order to address this research gap, this study examines task-related antecedents of turnover intentions in temporary organizations (TITO) using a sample of 253 employees working in project teams. The results show that inter-role conflict is the most influential antecedent of TITO. Unlike suggested by extant literature, members of TOs seem to be willing to accept down-cuts in job autonomy and meaningfulness of their work, without developing turnover intentions while working for TOs. Furthermore, the results confirmed a direct relationship between TITO and turnover intentions from the permanent organization (TIPO). Members of TOs that want to, but cannot leave their project team seem to develop TIPO.     

Are small countries too powerful within the ECB?

This paper analyzes the possible consequences of diverging economic developments within the euro area, given the current decision-making process of the European Central Bank (ECB). For the German Bundesbank, the role model of the ECB, there is evidence that differences in the economic situation in the various states affected voting behavior in the Governing Council. For the euro area countries, the paper finds that, despite convergence, important differences in terms of economic performance and preferences remain. As all national central banks have one vote within the Governing Council of the ECB, there is a risk that national considerations may prevail over EMU-wide considerations.     

Eating fast food: attitudes of high‐school students

Alarmingly consistent recent research shows that industrially produced foods such as fast food contain compounds that add to obesity and high cholesterol among young people. Less physical activity and a higher propensity to eat ready‐made food (in Sweden and internationally) have aggravated the health situation for the young generation. They also have become ‘addicted’ to sugar by the consumption of lemonade and other sweet drinks that are often served in conjunction with fast food. Food consumption patterns are highly cultural, and, once formed in early years, they become difficult to change. The findings of this study, which was based on a small sample of written accounts and transcribed interviews, indicate that high‐school students in Sweden are well aware of the good and bad attributes of fast food, such as: speed, convenience, fat and sugar. Clear differences in attitude were found between male and female students: female students view fast food in a broad food chain context, whereas male students concentrate on fast eating and satiety.