What moves option‐implied bond market expectations?

This article examines the impact of macroeconomic news announcements on bond market expectations, as measured by option‐implied probability distributions of future bond returns. The results indicate that expected bond market volatilities increase in response to higher‐than‐expected inflation and unemployment announcements. Furthermore, the asymmetries in bond market expectations are found to be affected mostly by surprises in inflation and economic production figures. In particular, it is found that higher‐than‐expected inflation announcements cause optionimplied bond return distributions to become more negatively skewed or less positively skewed, implying a shift in market participants' perceptions toward future increases in interest rates. Finally, the results indicate that market expectations of future extreme movements in bond prices are virtually unaffected by macroeconomic news releases. Some evidence is found, however, that suggests that after extreme surprises in inflation announcements market participants attach higher probabilities for extreme movements in bond prices. © 2005 Wiley Periodicals, Inc. Jrl Fut Mark 25:817–843, 2005     

The myth of flexibility in organizational change

In this article we examine the complex nature of organizational flexibility. We question the myth of flexibility as exclusively a top management interpretation of constant adaptiveness to environmental change by exploring the various rigidities involved in a seemingly adaptive organization. Our long-term study of a major Finnish commercial bank under deregulation identified several dominant forms of temporal flexibility–rigidity configurations: formal rigidities, flexible rigidities, rigid flexibilities and defensive rigidities. These configurations were revealed by focusing on the structural tensions which emerge between different levels of management and on the different interpretations given by competing groups to the notion of “organizational flexibility” within a process of change.     

Equity volatility connectedness across China’s real estate firms and financial institutions

The study investigates the dynamic equity volatility connectedness across the major real estate firms, banks, and other financial institutions in China. Based on the relative level of equity volatility connectedness, the study also examines the systemic importance of real estate firms and banks. The study shows that despite widespread worries about potential real estate bubbles in China, total directional connectedness from real estate firms to banks has decreased over the sample period. In contrast, total directional connectedness from banks to the real estate firms and to the financial institutions has become stronger over the sample period, which implies stronger risk originating from the banking sector. The study also shows that size plays an important role in determining the systemic importance of a real estate firm to the banking sector. The largest real estate firm displays the highest average systemic importance ranking. However, size does not appear to be the determinant factor of the systemic importance of a bank to the financial system. The largest bank shows the lowest average systemic importance ranking and 70% probability of being the least or second least systemically important bank in the long run.     

The effect of compulsory face mask policies on community mobility in Germany*

There is an ongoing debate about face masks being made compulsory in public spaces to contain COVID-19. A key concern is that such policies could undermine efforts to maintain social distancing and reduce mobility. We provide first evidence on the impact of compulsory face mask policies on community mobility. We exploit the staggered implementation of policies by German states during the first wave of the pandemic and measure mobility using geo-located smartphone data. We find that compulsory face mask policies led to a short-term reduction in community mobility, with no significant medium-term effects. We can rule out even small increases in mobility.