Trust Me! I am a European Central Banker

In the aftermath of the financial crisis, the European Central Bank (ECB) has experienced an unprecedented deterioration in the level of trust. This raises the question as to what factors determine trust in central banking. We use a unique cross‐country data set that includes a rich set of socioeconomic characteristics and supplement it with variables meant to reflect a country's macroeconomic condition. We find that besides individual socioeconomic characteristics, macroeconomic conditions play a crucial role in the trust‐building process. Our results suggest that agents are boundedly rational in the trust‐building process and that current ECB market operations may even be beneficial for trust in the ECB in the long run.     

Performance Management in the Public Sector: Past Experiences, Current Practices and Future Challenges

This paper reviews developments in research into public-sector performance management over the past 20 years. Particular attention is paid to four increasingly influential research approaches in this area: multidimensional stakeholder approaches, the balanced scorecard approach, institutional approaches and the radical learning approach. Opportunities for applying these approaches in further research are also outlined. These opportunities are discussed in light of changing reform agendas centred on growing concerns with managing outcomes and relative performance evaluation as means of fostering an enhanced citizen or beneficiary orientation, inter-organisational collaboration and learning in the public sector.     

An Explanation of Negative Swap Spreads: Demand for Duration from Underfunded Pension Plans

The 30‐year U.S. swap spreads have been negative since September 2008. We offer a novel explanation for this persistent anomaly. Through an illustrative model, we show that underfunded pension plans optimally use swaps for duration hedging. Combined with dealer banks' balance sheet constraints, this demand can drive swap spreads to become negative. Empirically, we construct a measure of the aggregate funding status of defined benefit pension plans and show that this measure helps explain 30‐year swap spreads. We find a similar link between pension funds' underfunding and swap spreads for two other regions.     

Internal Service Quality and the Psychosocial Work Environment: An Empirical Analysis of Conceptual Interrelatedness

There is a need to integrate service quality concepts withconcepts from other research fields, such as the psychosocialwork environment, to help us better understand and create abasis for quality control in services. The main aim of this paperis to explore empirically the relationships between thepsychosocial work environment and internal service qualily. Weuse concepts and measures derived from psychosocial workenvironment theory and service quality theory respectively. Datawere collected from 555 employees in a Swedish computerservice company using questions from a Stress Profile as well as from a Quality Profile. All 52 items from the Stress Projile and20 items from the Quality Profile were entered into a factoranalysis. The main result of the study is not the exact outcome ofthe factor analysis per se, but rather the point that questionsderived from two different research fields appear to measuredifferent mental representations of work conditions. Clearly,interdependence exists between the psyclzosocial workenvironment and internal quality. It is quite concmon to ncap adrestructure service processes in order to improve internal qualityin an attempt to solve quality problems created by organisationalchanges. We suggest that it should be equally inportant to takenieasures to increase work satisfaction by improvingpsychosocial work conditions.     

How Profit Shifting May Increase the Tax Burden of Multinationals: A Simple Model with Discrete Investment Choices

This paper models a Stackelberg tax setting game between two revenue‐maximizing countries which compete for the location of a single production plant owned by a multinational firm. We introduce the possibility of profit‐shifting activities by the multinational firm and investigate how a change in the costs of profit shifting affects equilibrium tax rates, revenue, and the tax burden of the multinational firm. We show that in most cases, tax rates of the two countries will be higher under profit shifting than without. If the costs for profit shifting are not too low, the strategic adjustment of profit tax rates will typically harm the multinational firm.     

SUPER-SPECIALIZATION AND THE GAINS FROM TRADE

An important facet of "globalization" is the spread of cross-border production, which is variously known as intro product specialization, super-specialization, or production fragmentation. This advanced stage in the international division of labor works particularly well between high-wage developed and low-wage emerging economies. But it is precisely this context in which the practice has been criticized for destroying jobs and undermining wages.
This paper examines the welfare implications of this type of specialization on the part of labor-intensive, import-competing industries in advanced countries. The results will surprise the skeptics, for when import-competing industries abandon production of labor-intensive components, wages rise and industry employment and output expand. National welfare increases. For a large country, the terms of trade improve, raising national welfare still further.