Incomplete Information in Monetary Policy Games: Rules Rather Than a Conservative Central Banker

Time inconsistency in monetary policy can be addressed appointing a conservative central banker. But incomplete information about the central banker's preferences impairs the performance of delegation schemes. Firstly, the ensuing ex-ante variability of monetary response lowers welfare. Secondly, partial independence schemes may prove inadequate because reputation — not only legal arrangements — defines the actual degree of independence. The incumbent may exploit his reputation to impose too conservative policies whereas, if he lacks reputation, partial independence forces him to accommodate. As a result, simple rules may be preferred.
…I do not believe that we should always get the best man for the post; often I fear that we should not even get a tolerable man.
(W. Bagehot, The Government of the Bank of England, in 'Lombard Street')     

A simple and flexible alternative to Stability and Growth Pact deficit ceilings. Is it at hand?

We model a monetary union where fiscal discretion generates excessive debt accumulation in steady state and inefficiently delayed debt adjustment following shocks. By setting a debt target and raising the political cost of deviating from the optimal pace of debt reversal¸ institutional design induces fiscal policymakers to implement unbiased responses to shocks. This is partly achieved by increasing the transparency of the decision-making process. We therefore call for more focused supervision tasks for the European Commission and for parliamentary discussion whenever a disagreement arises between the Commission and a national government.     

A NEW CINDERELLA STORY: JOINT VENTURES AND THE PROPERTY RIGHTS THEORY OF THE FIRM

Joint ventures (JVs) are a common form of inter-firm collaboration and, unsurprisingly, the subject of a vast literature, extending from economics to management and business studies. Issues of control are central to the definition of JVs, and this naturally calls for an interpretation in the context of the property rights theory (PRT) of the firm. In a series of seminal papers, Grossman, Hart and Moore (GHM) offer a rigorous framework to predict the allocation of control rights. Notably, under the standard assumptions of GHM, JVs are suboptimal. However, JVs are not suboptimal in more general settings where a number of the original framework's assumptions are relaxed. In the context of PRT, this paper surveys more than 20 contributions that address the optimality of JVs under contract incompleteness. The surveyed papers question the assumptions of GHM and reveal the circumstances in which JVs outperform sole ownership. Although contributions are scattered over time and bibliographical sources, we believe sufficient material has accumulated over 25 years of economic modelling to encourage some systematization. The discussion is organized in an intuitive and non-technical way; in particular, effort is devoted to analysing each paper in detail and providing a unified framework.     

Online Education: Values Dilemma in Business and the Search for Empathic Engagement

Online education lacks the moral and ethical engagement as well as the empathic interactions that are essential and integral to true liberal education, including business. While the online venue can provide useful information and put libraries at the hands of the student or employee, there is an implicit lack of focus on the sacredness and centrality of the person, his or her values, attitudes, needs, and expectations. The focus of online education is on the delivery of data, not the student’s engagement with the material or the process. Critically absent from online education is the ability to explore the transformation of data as it changes, first to information, then to knowledge, and finally to wisdom, within each person. Finally, absent is the ability to raise the level of abstraction. Since all needs to be measurable in concrete terms in online education, we are left with the language of metrics, such as deliverables, outcomes, inputs, and outputs. Where is the person in all of this? Where is the focus on the moral compass that is so necessary in any type of education?     

What makes a joint venture: Micro‐evidence from Sino‐Italian contracts

This paper provides new contract-level evidence on control rights allocation in order to define what makes a joint venture. Property rights theory of the firm identifies circumstances under which joint control alleviates investment distortions due to contract incompleteness. We compare predictions of the theoretical literature with actual governance structures of Sino-Italian joint ventures, as reported in a questionnaire submitted to the entire population of Italian enterprises operating in China. With an exceptional response rate of 60%, our evidence confirms most of the theoretical predictions and helps select among competing approaches to model joint ventures.     

From Hippocrates to HIPPA: The Collapse of the Assumptive World

This paper studies the developments in the ethical concerns for physicians (Business Concerns) and job satisfaction contigent upon changes in Physicians’ assumptive world.     

Affirmative Action Policy and Changing Views

Critiquing any practice, theory, or law, requires understanding the characteristics of the environment which created a need for this law. There are hundreds of different cultures in the world, and each one has its own set of norms, characteristics, and values. What in one country is perceived normal, ethical or unethical, right or wrong, may not be the same somewhere else in the world. The first civilizations begun in Africa and Europe many thousands of years ago when people were hunters and nomads, it is not unreasonable to suspect that many of those traits and characteristics have been socially transferred and/or inherited by future generations. Anthony F. Libertella is the Dean of the School of Business, Adelphi University, Garden City, NY. Sebastian A. Sora is an Associate Professor of Management, Adelphi University, Garden City, NY. Samuel M. Natale is a Professor of Management, Adelphi University, Garden City, NY and, concurrently, Senior Research Associate, Department of Educational Studies, University of Oxford, England.     

ἐμπάθɛια (Empatheia) and Caritas: The Role of Religion in Fair Trade Consumption

There is much still to learn about the nature of fair trade consumers. In light of the Pope’s encyclical Caritas in Veritate, this article sought to advance the current understanding by investigating the role of religion in fair trade consumption. In this study, fair trade consumers and non-consumers across many religions as well as the non-religious described their consumption of fair trade products as well as the use of their religious beliefs in their purchase behavior. It appears that the non-religious are slightly more inclined toward buying fair trade products. Of the religious observers studied, Buddhists have a greater propensity to buy fair trade. The relationship between religion and fair trade consumption is complex in that religious affiliation – group membership – alone is not enough to encourage members to buy fair trade; rather, it is the use of religious beliefs as a criterion in consumption behavior that linked religion to fair trade consumption.