Exchange Rate Volatility, Nominal Rigidities, and Persistent Deviations from PPP

It is shown how nominal exchange rate volatility can cause persistent deviations in the real exchange rate. The key to nominal rigidities is a capital market imperfection implying that agents cannot hedge perfectly against consumption risks. As a consequence, nominal changes have real effects by both affecting the ex post real purchasing power of savings and by affecting the ex ante incentives in savings and labor supply. The consequences of exogenous changes in the nominal exchange rate are considered in an OLG version of a two sector small open economy with competitive product and labor markets.J. Japan. Int. Econ.,December 1997,11(4), pp. 584–609. Department of Economics, University of Aarhus, 8000 Aarhus, Denmark.     

Elicitation using multiple price list formats

We examine the properties of a popular method for eliciting choices and values from experimental subjects, the multiple price list format. The main advantage of this format is that it is relatively transparent to subjects and provides simple incentives for truthful revelation. The main disadvantages are that it only elicits interval responses, and could be susceptible to framing effects. We consider extensions to address and evaluate these concerns. We conclude that although there are framing effects, they can be controlled for with a design that allows for them. We also find that the elicitation of risk attitudes is sensitive to procedures, subject pools, and the format of the multiple price list table, but that the qualitative findings that participants are generally risk averse is robust. The elicitation of discount rates appear less sensitive to details of the experimental design. Electronic Supplementary Material Supplementary material is available in the online version of this article at . JEL Classification C9, D81, D91 An erratum to this article is available at .     

Refining the debate on GM crops using technological foresight—the Danish experience

Rapid developments in and the controversial nature of biotechnology call for communication, networks, partnerships, and collaboration in research, not just among researchers, but also between researchers and research “users” in industry, government, and elsewhere. Technological foresight appears to offer a coordinating method for developing and strengthening those linkages. To test this, a technological foresight study was performed on genetically modified (GM) crop technology in the Danish context. The background of the study was the conflict and intense debate in Denmark over applications of gene technology, especially over the deliberate release of genetically modified (GM) crops. However, the current debate characteristically involves sharply opposed fronts, lacking willingness and courage to engage in a free-flowing and open-minded debate on both rational and normative components of biosafety. In it, stakeholders and experts on both side of the conflict advocate widely differing opinions. Without a proper generally intelligible dialogue, the broader public audience finds it hard to comprehend this type of debate. The study pursues the notion that public dialogue can act as a driver of future applications in the technological domain, specifically GM crops. The study concluded with a stakeholder workshop that revealed three key issues that might provide helpful starting points for a more free-flowing and open-minded debate about the future of GM crops. The issues were those arising from the following statements: a broad perspective on risk is crucial; international regulation must make allowance for developing countries; a better configuration of the risk debate is needed. These issues are discussed in more details in the article.     

Cause-related marketing 2.0: Connection,collaboration and commitment

The article aims to explore and revise cause-related marketing (CRM) in light of an emerging concept of the market and the roles assigned to companies and consumers in marketing communication processes. Based on a dialogical reflexive approach to case studies, we take our point of departure in theoretically identifying key CRM constituents and their interrelations, and we show how current theories within CRM build upon axioms of a traditional firm-centric view on value creation and fail to meet the challenges of new market structures and relations. This tension of axioms provides a point of direction for introducing the Pepsi Refresh Project as a case illustration of an alternative CRM practice that redefines CRM from company-driven to community-driven – and points towards relocating CRM from an overt to a covert brand and marketing communication strategy. CRM becomes a joint value- and identity-constructing practice transforming consumer criticism into brand involvement and community commitment. By reflexively merging theoretical and case insights, the contribution of the article lies in the revisiting of existing CRM theories in the context of connected, critical and empowered consumers and the subsequent outlining of what we suggest to be CRM 2.0.     

A relationship strategy perspective on relationship portfolios: Linking customer profitability,commitment, and growth potential to relationship strategy

The paper develops a three-dimensional portfolio model for business relationships which distinguishes among six different categories. Based on assessments of customer profitability, customer commitment, and growth potential, the positioning of a given customer relationship in the portfolio allows managers to determine appropriate customer relationship strategies and appropriate performance indicators. Results from applying the portfolio model are reported and managerial implications and future research are discussed.     

Exchange Rate Pegs, Fiscal Policy and Credibility

In a fixed exchange rate regime, an exchange rate change can be a swift way to change the real exchange rate in the short run. Fiscal policy also affects relative prices, and fiscal policy response to various types of shocks can therefore be crucial for the credibility of an exchange rate peg. We develop a model within which fiscal policy plays a crucial role for ensuring the viability and thus credibility of an exchange rate peg. We use the insights of this model to take a closer look at Denmark, which has successfully pursued a fixed exchange rate policy since 1982.

Flows of people,flows of ideas,and the inequality of nations

The present paper examines a neglected determinant of aggregate productivity: temporary cross-border flows of people. We hypothesize that interaction between people from different nations facilitates the international diffusion of ideas, thus stimulating aggregate productivity. In order to assess the causal impact of people flows on productivity, we construct an instrument for people flows. By analogy to the trade/growth literature, this instrument is derived from a fitted gravity equation involving geographic determinants of bilateral travel flows. Our cross-section analysis reveal that greater international interaction leads to higher productivity; a very similar result, qualitatively as well as quantitatively, is obtained when we employ dynamic panel data methods for the purpose of identification.     

New institutional economics: what does it have to offer?

This article discusses the empirical relevance of what is considered two prinicipal contributions to the new institutional economics–the contributions of A. Schotter and O. Williamson – and draw three general conclusions. First, it is argued, on the basis of a comparison of the above mentioned two contributions to new institutional economics, their empirical relevance cannot be discussed in general but must be based on separate analyses of the two contributions and will depend on the institutions which are analysed. Secondly, that it is especially within analyses of consequence and design of institutions that the Williamson-approach to new institutional economics presently has something to offer while there seems to be rather limited possibilities for application of the approach of Schotter. Thirdly, that in their future development, the two contributions can probably both mutually benefit each other and benefit from an integration of elements from other institutional theories.