Sensory Experiences and Expectations of Italian and German Organic Consumers

We explore sensory experiences and expectations of Italian and German organic consumers when purchasing and eating organic food. Ten focus group interviews were performed and the results were analyzed using qualitative content analysis. Outcomes indicated that although sensory attributes are not the main purchase drivers, flavor and odor are the most important in driving consumers' choice. Findings also suggested that training consumers' sensory abilities offers new market opportunities to organic marketers. From a marketing perspective, Italian consumers seem to equally appreciate nonsubjective as well as subjective marketing information about organic products, whereas in Germany non subjective aspects appear to be predominant.     

Capital requirements and business cycle regimes: Forward-looking modelling of default probabilities

This paper proposes a forward-looking model for time-varying capital requirements, which finds application within Basel II. The model rests on the relationship between default rates and the business cycle: by positing two regimes, expansion and recession, and by forecasting the associated probabilities, the default probability for each rating class is defined as the expected value of a default rate whose distribution is a mixture of an expansion and a recession distribution. The application to US data over the forecasting period 1971–2002 provides evidence that the model makes it possible to preserve the risk sensitivity of the capital requirement and at the same time to dampen procyclicality.     

The theoretical and empirical fragilities of the expansionary austerity theory

Criticism to expansionary austerity theory has extensively addressed the methodological problems affecting the econometric techniques that underpin it; however, few efforts have formally analyzed its theoretical strictures. In this article, the authors develop a more general and comprehensive critique, both from a theoretical and from an empirical perspective. They first present a short-run model that formally describes the theoretical background of specific policy measures advocated by expansionary austerity supporters. They show how these measures might only have expansionary outcomes under extreme and unrealistic conditions. The authors then move to the data and provide an econometric analysis of the key variables that leave the results of our theoretical model undetermined; their findings reinforce the validity of our theoretical critique. Since 2007, when an important opportunity to test expansionary austerity presented itself with the recession, the core mechanisms of expansionary austerity theory seem to not have been working, to say the least. In fact, austerity measures delivered perverse results precisely in the countries where they were expected to be most effective.