Robustly optimal monetary policy in a microfounded New Keynesian model

We consider optimal monetary stabilization policy in a New Keynesian model with explicit microfoundations, when the central bank recognizes that private-sector expectations need not be precisely model-consistent, and wishes to choose a policy that will be as good as possible in the case of any beliefs close enough to model-consistency. We show how to characterize robustly optimal policy without restricting consideration a priori to a particular parametric family of candidate policy rules. We show that robustly optimal policy can be implemented through commitment to a target criterion involving only the paths of inflation and a suitably defined output gap, but that a concern for robustness requires greater resistance to surprise increases in inflation than would be considered optimal if one could count on the private sector to have “rational expectations.”     

Solidarity and Probabilistic Target Rules

We consider a probabilistic approach to collective choice problems where a group of agents with single-peaked preferences have to decide on the level or location of a public good. We show that every probabilistic rule that satisfies Pareto efficiency and "solidarity" (population-monotonicity or replacement-domination) must equal a so-called target rule.     

Retail fairness: Exploring consumer perceptions of fairness towards retailers’ marketing tactics

The concept of fairness has received great attention in consumer behavior research lately. However, the focus of these studies has mainly been the understanding of fairness in terms of pricing rather than exploring the consumers’ perceptions of fairness itself. This study explores the consumers’ perceptions of fairness as an outcome of a retailer’s marketing tactics. Based on 36 in-depth interviews this study submits a conceptualization of retail fairness from the consumers’ point-of-view. The concept of retail fairness constitutes of three dimensions and nine sub-dimensions, expanding our knowledge of the construct. The study posits a crucial link between increased honesty, ethical, and moral behavior and the understanding of retail fairness. Theoretical and managerial implications are discussed.     

Detecting Supply Chain Innovation Potential for Sustainable Development

In a world of limited resources, it could be argued that companies that aspire to be good corporate citizens need to focus on making best use of resources. User value and environmental harm are created in supply chains and it could therefore be argued that company business ethics should be extended from the company to the entire value chain from the first supplier to the last customer. Starting with a delineation of the linkages between business ethics, corporate sustainability, and the stakeholder concept, this article argues that supply chains generally have a great innovation potential for sustainable development. This potential could be highlighted with system thinking and the use of change management knowledge, promoting not only innovations within technology but also within organizational improvement. We propose process models and performance indicators as means of highlighting improvement potential and thus breaking down normative business ethics’ requirements to an opertionalizable corporate level: Good business ethics should focus on maximizing stakeholder value in relation to harm done. Our results indicate that focusing on supply chains reveals previously unknown innovation potential that seems to be related to limited system understanding. The assumption is that increased visibility of opportunities will act as a driver for change. Results also highlight the importance of focusing on sustainability effects of the core business and clearly relating value created to harm done.     

Relative concerns of rural-to-urban migrants in China

As their environment changes, migrants constitute an interesting group to study the effect of relative income on subjective well-being. This paper focuses on the huge population of rural-to-urban migrants in China. Using a novel dataset, we find that the well-being of migrants depends on several reference groups: it is negatively affected by the income of other migrants and workers of home regions; in contrast, we identify a positive, ‘signal’ effect vis-à-vis urban workers: larger urban incomes indicate higher income prospects for the migrants. These effects are particularly strong for migrants who wish to settle permanently, decline with years since migrations and change with other characteristics including work conditions and community ties.     

Decision parameters in global R&D management

This paper addresses the question of which variables have what kind of impact on the decision to locate new R&D facilities in countries different from the home country of a corporation. In the first section of the paper we demonstrate the complexity of this question by referring to empirical research, managerial statements and literature. We then develop a conceptual model for the location decision of international R&D activities. This is based on Porter's (1990) framework of the factors constituting the competitive advantage of nations. In the final section of this paper we show how such a model helps us to understand and also to explain a number of management issues related to global R&D activities.     

Household Saving in Developing Countries: First Cross-Country Evidence

Although most studies have relied on domestic or private sectorsaving data, this article uses household data available fromthe U.N. System of National Accounts for a sample of 10 countries.Household saving functions are estimated using combined time-seriesand cross-country observations in order to test households'responses to income and growth, rates of return, monetary wealth,foreign saving, and demographic variables. The results showthat income and wealth variables affect saving strongly andin ways consistent with standard theories. Inflation and theinterest rate do not show clear effects on saving, which isalso consistent with their theoretical ambiguity. Foreign savingand monetary assets have strong negative effects on householdsaving, which suggests the importance of liquidity constraintsand monetary wealth in developing countries.     

Short-term capital flows under flexible exchange rates

Zusammenfassung Kurzfristige Kapitalbewegungen bei flexiblen Wechselkursen. — In dieser Arbeit werden die kurzfristigen Kapitalzuflüsse in ihrer Eigenschaft als ausl?ndische Nachfrage nach heimischem Geld behandelt. Unter diesem Aspekt hat ein exogener Zufluβ bei flexiblen Wechselkursen eine unmittelbar deflation?re Wirkung. Auβerdem werden die wechselkursinduzierten kurzfristigen Kapital-bewegungen in einem einfachen makro?konomischen Modell analysiert. Selbst wenn man den mehr traditionellen Typ von zinselastischen Kapitalbewegungen in dem Modell berücksichtigt, führt der hier gew?hlte Ansatz zu bedeutsamen Modifikationen der Standardargumentation.

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Résumé Les flux des capitaux à court terme sous les conditions de cours de change flexibles. — Cet article se concentre sur les afflux des capitaux à court terme compris comme démande extérieure en faveur d’argent local. Un afflux exogène sous cet angle a un effet directement déflationniste sous les conditions de cours de change flexibles. De plus, cet article analyse le r?le des afflux des capitaux à court terme induits par le cours de change. Même en considérant le type plus traditionel des flux des capitaux étant élastique envers l’intérêt dans notre modèle cette approche mène aux qualifications signifiantes du modèle de standard.

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Resumen Flujos de capital de corto plazo bajo tasas de cambio flexibles. — Este artículo se concentra sobre los influjos de capital de corto plazo considerados como demanda extranjera por moneda doméstica. Un influjo exógeno tiene, bajo este punto de vista, un efecto deflatorio directo bajo tasas de cambio flexibles. Además, este articulo analiza el rol de los flujos de capital de corto plazo inducidos por variaciones en la tasa de cambio en un modelo macro-económico simple. Incluso considerando en nuestro modelo flujos de capital elásticos con respecto a la tasa de interés del tipo más tradicional, este enfoque nos muestra cualificaciones significativas del modelo standard.

     

Zum Problem optimaler Wachstumspfade in mehrsektoralen Modellen

Zusammenfassung Ausgangspunkt bildet ein Produktionsmodell, das durch eine Kombination von zwischensektoraler Prozeßbeschreibung und allgemeinen sektoralen Produktionsfunktionen gewissen empirischen Befunden über input-output-Struktur und Substitutionseffekten theoretisch zu entsprechen versucht. Auf dieser Basis läßt sich eine Reihe von Problemen des optimalen Wachstums (welfaremaximierende Pfade, optimale Beschäftigungspfade, konsummaximierende Pfade) als klassische Variationsprobleme formulieren. Schließlich wurde ein allgemeiner Ausblick auf andere Interpretationen (steuerbare Prozesse) und diesen angemessene Lösungstechniken größerer Leistungsfähigkeit (Maximumprinzip von Pontrjagin) eröffnet.Mit 1 Textabbildung