Modelling the Link Between US Inflation and Output: The Importance of the Uncertainty Channel

This article employs an augmented version of the UECCC GARCH specification proposed in Conrad and Karanasos (2010) which allows for lagged in‐mean effects, level effects as well as asymmetries in the conditional variances. In this unified framework, we examine the twelve potential intertemporal relationships among inflation, growth and their respective uncertainties using US data. We find that high inflation is detrimental to output growth both directly and indirectly via the nominal uncertainty. Output growth boosts inflation but mainly indirectly through a reduction in real uncertainty. Our findings highlight how macroeconomic performance affects nominal and real uncertainty in many ways and that the bidirectional relation between inflation and growth works to a large extent indirectly via the uncertainty channel.     

Fare Thee Well? An Analysis of Buyout Funds’ Exit Strategies

This paper analyzes exit strategies of buyout funds in portfolio companies following initial public offerings (IPOs). We use a data set of 222 buyout‐backed IPOs in the United States from 1999 to 2008, including hand‐collected data about each exit process, to draw a detailed roadmap of buyout investors’ divestment processes. Using this data, we document the timing and aggressiveness of the exit strategies, and analyze to which degree a multitude of possible determinants influence the choice of a given exit strategy. Our results indicate that buyout funds remain invested in their portfolio companies for a substantial period of time after the IPO, and that the choice of a given exit strategy depends not only upon the characteristics of each respective portfolio company, but also on the financial success of the deal from the perspective of the buyout investor.     

Strategic factor markets,scale free resources,and economic performance: The impact of product market rivalry

This paper analyzes how scale free resources, which can be acquired by multiple firms simultaneously and deployed against one another in product market competition, will be priced in strategic factor markets, and what the consequences are for the acquiring firms' performance. Based on a game‐theoretic model, it shows how the impact of strategic factor markets on economic profits is influenced by product market rivalry, preexisting competitive (dis)advantages, and the interaction of acquired resources with those preexisting asymmetries. New insights include the result that resource suppliers will aim at (and largely succeed in) setting resource prices so that the acquiring firms earn negative strategic factor market profits—sacrificing some of their preexisting market power rents—by acquiring resources that they know to be overpriced. Copyright © 2014 John Wiley & Sons, Ltd.     

Book Notes: John N.Adams &; Roger Brownsword: Understanding contract law, 4th edition. London: Thomson Sweet &; Maxwell. ISBN 0-421-85850-8. 273 pp., GBP 13.95.

Book Notes

Book Notes: John N.Adams &; Roger Brownsword: Understanding contract law, 4th edition. London: Thomson Sweet &; Maxwell. ISBN 0-421-85850-8. 273 pp., GBP 13.95.     

On the Closeness Aspect of Three Voting Rules: Borda – Copeland – Maximin

This paper provides a comparison of three voting rules, the Borda rule, the Copeland rule and the maximin rule. Our analysis based on the rankings derived from those voting rules will shed new light on existing comparisons based on “closeness” between the three voting rules under investigation. In particular it will be shown that both, the rankings derived from the Borda rule and the maximin rule and the rankings derived from the Copeland rule and the maximin rule, will be exactly the opposite for certain preference profiles.     

Reliable Inference in Categorical Regression Analysis for Non‐randomly Coarsened Observations

In most surveys, one is confronted with missing or, more generally, coarse data. Traditional methods dealing with these data require strong, untestable and often doubtful assumptions, for example, coarsening at random. But due to the resulting, potentially severe bias, there is a growing interest in approaches that only include tenable knowledge about the coarsening process, leading to imprecise but reliable results. In this spirit, we study regression analysis with a coarse categorical‐dependent variable and precisely observed categorical covariates. Our (profile) likelihood‐based approach can incorporate weak knowledge about the coarsening process and thus offers a synthesis of traditional methods and cautious strategies refraining from any coarsening assumptions. This also allows a discussion of the uncertainty about the coarsening process, besides sampling uncertainty and model uncertainty. Our procedure is illustrated with data of the panel study ‘Labour market and social security' conducted by the Institute for Employment Research, whose questionnaire design produces coarse data.     

The Context of Entrepreneurial Judgment: Organizations,Markets, and Institutions

The economics and management literatures pay increasing attention to the technological, competitive, and institutional environment for entrepreneurship. However, less is known about how context influences the judgment of entrepreneurs. Focusing on the emerging judgment‐based approach to entrepreneurship, we argue that economics can say much about how the organizational, market, and institutional context shapes entrepreneurial judgment. We describe entrepreneurs as individuals who deploy scarce, heterogeneous resources to service customer preferences at a profit. Because of uncertainty, this process is essentially experimental, and context influences the experimental process. Thus, entrepreneurs will seek to design the internal organization of the firm so that it facilitates internal experimentation. Moreover, the market or task environment determines the need for experimentation (e.g., how fast do consumer preferences change, how does technology evolve, which assets are available at which terms, etc.). Finally, the institutional environment influences, for example, the transaction costs of acquiring and divesting assets as firms adjust their boundaries through ongoing commercial experimentation.     

Barreras comerciales y empleo en las cadenas mundiales de suministro

A partir de estimaciones de la OIT del empleo en las cadenas mundiales de suministro, se estudia el impacto de las barreras al comercio de bienes y servicios sobre los empleos nacionales. El análisis empírico confirma las predicciones de un modelo teórico calibrado con datos de la WIOD para 2000 y 2011. Las barreras al comercio de bienes y servicios tienen un impacto transfronterizo sobre los empleos del sector directamente afectado y efectos indirectos sobre otros sectores que aumentan con el tiempo. La creciente interconexión entre países y sectores en las cadenas mundiales de suministro implica que las políticas comerciales pueden tener importantes efectos sobre los mercados de trabajo de otros países.