Trends in world trade

The current problems of international trade can certainly not be solved by resorting to the arsenal of national trade policies. World-wide economic losses would be the inevitable result. Therefore the first set of tripartite talks between the “major trading powers”, the USA, the EC and Japan, scheduled for October this year and dealing with mutual trade problems, will be a step in the right direction providing that these talks do not result in a defensive alliance against the trading interests of the developing countries.     

Leading from Behind – American Exceptionalism and President Obama’s Post-American Vision of Hegemony

This article explores the discursive performance and political significance of ‘American exceptionalism’ under President Obama. Moving beyond a critical examination of geopolitical identity, it investigates how representations of exceptionalism, understood as ideational construct of uniqueness and superiority, are linked to practices of US foreign and security policy that confirm, but also contest, established notions of American leadership in world politics. A particular focus lies on the 2012 presidential campaign, and how diverging ‘exceptionalist’ visions between Obama and Mitt Romney testified to competing ideas for American primacy and cooperative engagement. The article will further examine the cases of ‘leading from behind’ in Libya, American non-intervention against Assad in Syria, and US reactions to current crises concerning Ukraine and ISIS. The contextualisation of these episodes in contemporary, geopolitical discourse reveals how the practice of US foreign and security policy under Obama is shaped by a conflicted and paradoxical vision of post-American hegemony.     

Managing Legitimacy in Complex and Heterogeneous Environments: Sustainable Development in a Globalized World

The sustainability problems with regard to the production, distribution, and consumption of goods and services increasingly challenge the legitimacy of corporations. The literature distinguishes three strategies that corporations commonly employ to respond to legitimacy problems: adapt to external expectations, manipulate the perception of their stakeholders, or engage in a discourse with those who question their legitimacy. We discuss three approaches to determine the appropriate response strategy: one‐best‐way approach, contingency approach, and paradox approach. We argue that in the face of heterogeneous environments with conflicting demands, corporations that follow a paradox approach are likely to be more successful in preserving their legitimacy than those that adopt one of the other two approaches. We develop a theoretical framework for the application of different response strategies and explore the management of paradoxes by way of structural, contextual, or reflective means.     

Is there a Core of Macroeconomics that Euro Area Forecasters Believe In?

The quantity theory of money, Okun's law, and the Phillips curve are cornerstones of macroeconomic theory. But are they also of practical relevance? Using survey data for the euro area, we found that professional economists’ forecasts are consistent with a version of the quantity theory in which forecasts of the growth rate of money supply correlate in a proportional way with forecasts of the inflation rate. We also found that forecasts of changes in the unemployment rate and forecasts of the growth rate of real output are consistent with Okun's law. Evidence of a systematic link between forecasts of the inflation rate and forecasts of the unemployment rate, however, is not strong.     

The 1/N investment strategy is optimal under high model ambiguity

The 1/N investment strategy, i.e. the strategy to split one’s wealth uniformly between the available investment possibilities, recently received plenty of attention in the literature. In this paper, we demonstrate that the uniform investment strategy is rational in situations where an agent is faced with a sufficiently high degree of model uncertainty in the form of ambiguous loss distributions. More specifically, we use a classical risk minimization framework to show that, for a broad class of risk measures, as the uncertainty concerning the probabilistic model increases, the optimal decisions tend to the uniform investment strategy.To illustrate the theoretical results of the paper, we investigate the Markowitz portfolio selection model as well as Conditional Value-at-Risk minimization with ambiguous loss distributions. Subsequently, we set up a numerical study using real market data to demonstrate the convergence of optimal portfolio decisions to the uniform investment strategy.     

Extending private‐collective innovation: a case study

The private‐collective innovation model proposes incentives for individuals and firms to privately invest resources to create public goods innovations. Such innovations are characterized by non‐rivalry and non‐exclusivity in consumption. Examples include open source software, user‐generated media products, drug formulas, and sport equipment designs. There is still limited empirical research on private‐collective innovation. We present a case study to (1) provide empirical evidence of a case of private‐collective innovation, showing specific benefits, and (2) to extend the private‐collective innovation model by analyzing the hidden costs for the company involved. We examine the development of the Nokia Internet Tablet, which builds on both proprietary and open source software development, and that involves both Nokia developers and volunteers who are not employed by the company. Seven benefits for Nokia are identified, as are five hidden costs: difficulty to differentiate, guarding business secrets, reducing community entry barriers, giving up control, and organizational inertia. We examine the actions taken by the management to mitigate these costs throughout the development period.     

Has the Caribbean Basin Economic Recovery Act Achieved Its Stated Goals?

This paper examines the impact of CBERA (Caribbean Basin Economic Recovery Act) trade provisions to determine whether the program has achieved its stated goals. A major program enhancement had a negative impact across small beneficiaries, but countries with large manufacturing sectors were able to expand preferential export shares with negligible increases in total exports relative to GDP. Additional evidence supports the view that tariff preferences did not promote economic development in CBERA-eligible countries. Greater utilization of CBERA trade provisions will require expanding coverage to include all products of export interest to beneficiaries and reducing costs associated with administrative regulations and rules of origin.