Home sweet host: A cross‐country perspective on prudential and monetary policy spillovers through global banks

Prudential regulation of banks is multi‐layered: policy changes by home‐country authorities affect banks’ global operations across many jurisdictions; policy changes by host‐country authorities shape banks’ operations in the host jurisdiction regardless of the nationality of the parent bank. Do these policies create (unintended) cross‐border spillovers? Similarly, monetary policy actions by major central banks may also have effects on the behaviour of banks in other countries. This paper examines the effect that changes in home‐ and host‐country prudential measures have on cross‐border dollar credit provision, and how these interact with US monetary policy. We first run panel regressions with both layers of regulation, to examine which has a greater effect on cross‐border lending. We then use a novel approach to decompose growth in cross‐border bank lending into separate home, host and common components, and then match each with the corresponding home or host policies. Our results suggest that prudential policies can have spillover effects, which depend on the instrument used and on whether a bank's home or host country implemented them. Home policies tend to have larger spillovers on cross‐border US dollar lending than host policies. We also find that a tightening of US monetary policy can compound the spillovers of some prudential measures.     

The Importance of Tax Adjustments When Evaluating Wage Expectations*

Using elicited expectations of future gross salaries, we evaluate characteristics causing German students to make larger or smaller estimation errors. While students seem to underestimate actual salaries by 18 percent, we show that these errors are highly attributable to misconceptions of the progressive income tax. Developing a suitable adjustment procedure, we correct students’ estimates and find that errors decline by 12 percentage points. Conducting regression analyses, we reveal strong connections with students’ age, gender, work experience, secondary school track, and knowledge about student loans. These results change notably if not controlling for students’ misconceptions of the tax system.     

Me or information technology? Adoption of artificial intelligence in the delegation of personal strategic decisions

Artificial intelligence is revolutionizing the way we do business. Whereas both the adoption of technological innovations and strategic decision making have been subject to prior research, this experimental study is first to combine both. To understand the impact of choice complexity and cognitive perceptions on the willingness to delegate a strategic decision to an algorithm, we conducted an experiment with 310 participants. We find that although choice complexity has no effect, participants with low levels of situational awareness are more likely to delegate. The findings augment research on choice complexity in decision making by emphasizing the relevance of cognitive perceptions.     

Fetal Iodine Deficiency and Schooling: A Replication of Field,Robles, and Torero (2009)*

Scholars have theorized that congenital health endowment is an important determinant of economic outcomes later in a person's life. Field, Robles, and Torero (2009, American Economic Journal: Applied Economics 1, 140–169) find large increases in educational attainment caused by a reduction of fetal iodine deficiency following a set of iodine supplementation programs in Tanzania. We revisit the Tanzanian iodine programs with a narrow and wide replication of the study by Field et al. We are able to exactly replicate the original results. We find, however, that the findings are sensitive to alternative specification choices and sample restrictions. We try to address some of these concerns in the wide replication; we increase the sample size fourfold, and we improve the precision of the treatment variable by incorporating new institutional and medical insights. Despite the improvements, no effect is found. We conclude that the available data do not provide sufficient power to detect a possible effect, as treatment assignment cannot be measured with sufficient precision.     

Debating liberalism: Walter Eucken,F. A. Hayek and the early history of the Mont Pèlerin Society

The Review of Austrian Economics - Walter Eucken is mostly known for his impact on establishing the Social Market Economy in post-war Germany. In this paper we identify how Eucken was highly...     

Linking sustainable business models and supply chains — Toward an integrated value creation framework

Extant literature on sustainable business models highlights that value creation stems from resources exchanged in relationships between a focal firm and its stakeholders. In this context, the literature has, so far, focused on direct relationships. However, despite the acknowledged relevance of sustainability issues in supply chains, this relational view of the focal company and its direct stakeholders has not been extended toward value creation for and with indirect stakeholders, such as stakeholders of suppliers. Addressing this gap, this conceptual article integrates a relational view of sustainable supply chain management into the management of sustainable business models. It extends the scope of sustainable business models from relationships between the focal firm and its direct stakeholders to indirect relationships with stakeholders of suppliers. A framework is developed that supports analysis and management of value-creating relationships between the focal firm, suppliers, and stakeholders of suppliers. By extending the conceptualization of sustainable business models to consider relationship chains beyond direct relationships, this article proposes that a focal firm has to actively manage interactions both with suppliers and with suppliers' stakeholders.     

Wissensvermittlung durch ProduktplatzierungenProduct Placement and Knowledge Transfer

Although product placement research differentiates between specific placement effects, the placement of Brands and Brand information, which goes far beyond the mere presence of brands in media entertainment, are simply not taken into account. We assume that this form of product placement can generate knowledge and produce a learn effect. Actual insights on the cognitive effect of product placements, brand knowledge and Neurobiology, working theories and a Hypothesis on the growing knowledge gap, only go to reinforce this assumption and confirm that the learn effect through factors such as brand know-how, relevance, education and attractiveness of the media protagonist can be influenced. The results of an experiment in which audio-visual stimulus material was presented with or without placement showed the the information placed was recognized, remembered and therefore learned. While brand know-how and relevance have no influence on the intensity of this learn effect, attractive and well educated protagonists contributed to strengthen memory performance.     

Life-cycle funds: Much Ado about Nothing?

The core idea of life-cycle funds or target-date funds is to decrease the fund's equity exposure and conversely increase its bond exposure towards the fund's target date. Such funds have been gaining significant market share and were recently set as default choice of asset allocation in numerous defined contribution schemes or related old-age provision products in several countries. Hence, an assessment of life-cycle funds’ risk-return profiles – that is, the probability distribution of returns – is essential for sustainable financial planning of a large group of investors. This paper studies the risk-return profile of life-cycle funds in particular compared to simple balanced or lifestyle funds that apply a constant equity portion throughout the fund's term instead. In a Black–Scholes model, we derive balanced funds that reproduce the risk-return profile of an arbitrary life-cycle fund for single and regular contributions. We then analyze the accuracy of our results under more complex asset models with stochastic interest rates, stochastic equity volatility and jumps. We further show that frequently used ‘rule of thumb approximations’ that only take into account the life-cycle fund's average equity portion are not suitable to approximate a life-cycle fund's risk-return profile. Our results on the one hand facilitate sustainable financial planning and on the other hand challenge the very existence of life-cycle funds since appropriately calibrated balanced funds can offer a similar (often dominating) risk-return profile.     

An examination of mobile app usage and the user’s life satisfaction

Increased engagement with mobile apps is an emerging trend with people today. Mobile devices have become so personalized that many people consider their mobile device as an extension of themselves. Research has suggested that one driving factor in a person’s adoption of mobile apps is the pursuit of happiness. However, there is little research regarding the influence of apps on a person’s well-being. The purpose of this paper was to examine mobile app usage among college students and the relationship between app usage and one’s satisfaction with life. Findings suggest that there is a correlation between mobile app usage and a person’s level of satisfaction with life. Gender differences in app usage were also found.