Increasing longevity and social security reforms—A legislative procedure approach

Increasing longevity causes an upward trend in the dependency ratio in many countries. This raises concerns about the financial sustainability of social security schemes, and reform proposals and initiatives abound. It is shown that a fundamental policy choice inevitably arises since a given social security system cannot be maintained by simply indexing pension ages to longevity. The political reform process is analysed using the so-called legislative procedure. When longevity increases, the retirement age is raised more than proportionally to the increase in longevity, but the young also make larger transfers to the old.     

Genehmigungspflichten für Staatsfonds – Neuer deutscher Etatismus?

Anfang November 2007 legte das Bundeswirtschaftsministerium einen Gesetzentwurf zur Novellierung des Au?enwirtschaftsgesetzes vor, der darauf abzielt, ausl?ndische Beteiligungen an deutschen Unternehmen zu überprüfen. Wie sind solche Ma?nahmen gegen ausl?ndische Staatsfonds zu bewerten? Welche Rolle spielt China auf dem internationalen Kapitalmarkt? Prof. Dr. Ansgar Belke, 42, ist Inhaber des Lehrstuhls für Makro?konomik an der Universit?t Duisburg-Essen; Torben Hendricks, 30, Master Econ., ist wissenschaftlicher Mitarbeiter am Lehrstuhl für Makro?konomik der Universit?t Duisburg-Essen.     

Does ownership matter in the presence of strict antiactivism legislation? Evidence from equity transactions in Denmark

This study analyzes the effects of institutional and strategic investor equity transactions on the behavior of stock prices on the Copenhagen Stock Exchange (XCSE). Unlike the positive relationship between managerial ownership and security performance, we find that the relationship between ownership and performance is a bell-shaped curve. There is an optimal threshold level of ownership at which security performance, measured by abnormal returns, is maximized. At the threshold level, the management can take advantage of the shared benefit of control. Beyond the threshold level of ownership, the security performance decreases. We attribute this threshold level to an increasing entrenchment benefit.     

Labour Demand, Wage Mark-ups and Product Market Integration

Globalization makes it easier to relocate production and thus employment across countries. Therefore, it is often asserted that labour demand becomes more elastic, causing wage mark-ups to fall and thus erode the effective market power of trade unions. We explore this issue in a general equilibrium model where the elasticity of labour demand is endogenized and related to the facility by which production can be relocated across countries. Wages and employment increase unambiguously as a result of product market integration, but it is ambiguous whether wage mark-ups decrease or increase. A numerical illustration suggests that the elasticity effect – even when the wage mark-up falls – is of second order relative to the gains from trade.      

Identity problems of Danish consumer cooperatives

Consumer cooperatives were born together with industrial capitalism and its social classes, being a reaction against miserable economic conditions and disgracefully low positions of farmers and workers. Nowadays, the traditional, class-based motives have lost their importance, but still many consumers are attracted by consumer cooperatives and each year numerous consumers stand for election to the committees of consumer cooperatives. A recent survey amongst newly elected and newly retired committee members in Denmark reveals three major motivating factors: cooperative ideology, survival of local shops, and nutrition. Therefore it seems wise for consumer cooperatives to emphasize activities related to these motives, and by doing so they may eventually succeed in their search for a new identity.

---

Identitätsprobleme von dänischen Verbrauchergenossenschaften

Zusammenfassung Verbrauchergenossenschaften entstanden zusammen mit dem industriellen Kapitalismus und seinen sozialen Folgen und können als Reaktion auf die schlechte ökonomischen Bedingungen und die manchmal unwürdige Lage von Bauern und Arbeitern gesehen werden. Heutzutage haben die traditionellen klassenbezogenen Grundlagen des Genossenschaftsgedankens ihre Bedeutung weitgehend verloren, aber auch heute noch haben die Verbrauchergenossenschaften für viele Konsumenten ihre Attraktivität behalten, und jedes Jahr stellen sich zahlreiche Konsumenten für die Vorstandswahlen zur Verfügung.Der Beitrag berichtet über eine Umfrage unter solchen Vorstandsmitgliedern, die neu gewählt wurden, und solchen, die den Vorstand kürzlich verlassen haben. Dabei schälen sich drei verschiedene Motive für die Mitarbeit in den Genossenschaften heraus: die Genossenschaftsidee, das Überleben des kleinen Einzelhandels und Nahrung. Der Beitrag zieht daraus die Schlußfolgerung, daß Verbrauchergenossenschaften ihre Tätigkeit an diesen Motiven orientieren sollten, um auf diesem Wege eine neue und zeitgemäße Identität zu finden.

---

---

Torben Bager is Head of the Cooperative Research Unit at the University Centre of South Jutland, Glentevej 7, DK-6705 Esbjerg Ø, Denmark.     

ANALYTICAL EVALUATION OF VOLATILITY FORECASTS*

Estimation and forecasting for realistic continuous‐time stochastic volatility models is hampered by the lack of closed‐form expressions for the likelihood. In response, Andersen, Bollerslev, Diebold, and Labys (Econometrica, 71 (2003), 579–625) advocate forecasting integrated volatility via reduced‐form models for the realized volatility, constructed by summing high‐frequency squared returns. Building on the eigenfunction stochastic volatility models, we present analytical expressions for the forecast efficiency associated with this reduced‐form approach as a function of sampling frequency. For popular models like GARCH, multifactor affine, and lognormal diffusions, the reduced form procedures perform remarkably well relative to the optimal (infeasible) forecasts.     

Integrating Decentralized Strategy Making and Strategic Planning Processes in Dynamic Environments

Decentralized post‐bureaucratic organizations are deemed to display superior performance in dynamic environments, but recent evidence indicates that centralized integrative cross‐functional processes may be equally critical. Accordingly, this paper hypothesizes that organizational performance can be ascribed to the simultaneous emphasis on decentralized strategy making and strategic planning processes. This is investigated in a study of 185 manufacturing organizations operating in diverse industries spanning food processing and computer products. The study shows that both decentralized decision structure and planning activities are associated with higher performance in dynamic environments. These findings confirm that effective organizations engage in more complex strategy formation processes that complement the decentralized post‐bureaucratic form with formal mechanisms of rational analyses and operational integration. The paper highlights a need to extend our understanding of the duality between decentralization and planning.