Property Rights,Governance, and Economic Development

In this review article we give an intuitive account of why good institutions in general, and secure property rights in particular, matter for economic growth and development. We also discuss implications for good governance, defined as the efficient provision of property rights and other aspects of governance. Finally, we briefly touch on political institutions that might be conducive to good governance and thus economic development.     

Private information, money, and growth: Indeterminacy, fluctuations, and the Mundell-Tobin effect

We introduce an informational asymmetry into an otherwise standard monetary growth model and examine its implications for the determinacy of equilibrium, for endogenous economic volatility, and for the relationship between steady-state output and the rate of money growth. Some empirical evidence suggests that, for economies with low initial inflation rates, permanent increases in the money growth rate raise long-run output levels. This relationship is reversed for economies with high initial inflation rates. Our model predicts this pattern. Moreover, in economies with high enough rates of inflation, credit rationing emerges, monetary equilibria become indeterminate, and endogenous economic volatility arises.     

Modelling optimal strategies for the allocation of wealth in multicurrency investments

This paper analyzes rates of return on financial assets denominated in five major currencies and provides a framework for the determination of optimal strategies for the allocation of wealth in multicurrency investments. Three models are estimated: a univariate autoregressive conditional heteroskedasticity (ARCH) model, an extended ARCH model using the random coefficient (RC) procedure, and a pure RC model. A comparison of the forecasts of these models with those generated by a random walk model demonstrates that forecasts based on the RC/extended ARCH procedure are superior to those based on the random walk model and those based on direct ARCH estimation. These results could be useful for both international investors for the allocation of their wealth among fixed-income investment securities and central banks for the management of their external reserve assets.     

Struggling with Meaningfulness when Context Shifts: Volunteer Work in a German Refugee Shelter

This article draws on an ethnographic study of volunteer work in a German refugee shelter to explore how individual experiences of meaningfulness are intertwined with shifting discursive and organisational contexts. At the beginning of the so‐called refugee crisis, societal discourses portrayed this volunteer work as extraordinarily meaningful – a state we capture through the metaphor of ‘overflow’. This ‘overflow’ mobilised volunteers and was an important point of reference for framing their work experiences as meaningful. Later, shifting discursive and organisational contexts challenged their framings. Instead of letting go, however, the ‘overflow’ triggered volunteers to reframe their experience in dysfunctional ways in order to sustain their sense of meaningfulness. This paper reveals how shifting societal discourses feed into individual experiences of meaningfulness, shows how individuals may respond to such shifts in problematic ways and theorises the nature of such shifts in drawing on Swidler’s notion of settling contexts.     

Quality standards for used durables: An indirect subsidy?

We construct a theoretical framework to study the impact of quality standards for used durable goods on trade ?ows, pro?ts and consumer welfare. We show that asymmetric quality standards generate trade in used goods from high- to low-standard countries while at the same time reducing trade in new goods. Producers in the exporting country bene?t from this change while consumers lose. In the importing country consumers are better off but domestic industry is hurt. These ?ndings suggest that quality standards on used goods may be a powerful policy tool whose use should be monitored by the WTO.     

Testing the convergence hypothesis for Greece

The question of whether there is a tendency for regional convergence has become a central topic for economic research. This paper considers the issue of convergence across Greek regions, following the theoretical basis of the neoclassical model of economic growth. Our analysis finds no evidence of convergence and supports the hypothesis of dualism across the southern and the northern parts of the country. © 1997 John Wiley & Sons, Ltd.     

SIGNALING THROUGH POLITICAL CAMPAIGNS: ELECTIONS AS A REVELATION MECHANISM

Political campaigns are usually seen either as a way of passing information about candidates' intended policies to the voters or as a political liability of the candidates towards the interest groups that finance them. We provide a different interpretation of political campaigns using a political competition model for campaign promises and spending. In a principal–agent framework, elections are shown to be a truth revelation mechanism, in which the principal (voters) induces truthful revelation of ability by the agent (candidates). Campaign promises and spending coexist as an integral part of this mechanism. Political competition is then derived endogenously.     

Estimating financial distress with a dynamic model: Evidence from family owned enterprises in a small open economy

Employing earnings shortfall as a financial distress indicator, we formulate a dynamic nonlinear model, implementing Wooldridge's conditional maximum likelihood estimator and accounting for potentially endogenous covariates. Likewise, we not only achieve a significant improvement in consistency and classification accuracy over static approaches, but we also manage to understand better the evolution of the financial distress process. In our sample of Greek listed firms the higher the positive performance and the lower the leverage at the initial period the greater the chance that a company enters financial distress further down the road, possibly due to manager–owner overconfidence and debt-imposed discipline by company's creditors.