Determinants of the Effective Real Exchange Rate of the Synthetic Euro: Alternative Methodological Approaches

On the basis of historical data aggregated over the period 1973 to 2000, we have experimented with four different approaches to estimate the synthetic euro's equilibrium exchange rate. Using a number of competing models with the same data set, variable definitions and sample period offers the possibility to assess the uncertainty surrounding such equilibrium levels, both from an empirical (different estimates) and a theoretical viewpoint (different specifications). In this exercise, the 'Rest of the World' is proxied by the US, the UK, Japan and Switzerland, aggregated on the basis of trade weights.
We employed reduced form co–integration models, a structural VAR, a NATREX model (estimated in structural form) and the ECB's small–sized euro area wide macro–econometric model. In this order the approaches feature an increasing degree of 'structure', in the sense of the constraints based on economic theory embedded in the econometric models that were estimated. The results confirm the high likelihood for the euro having been undervalued in Q4 2000, while stressing the significant empirical and theoretical uncertainty with respect to the equilibrium exchange rate level.     

Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining

Abstract. On 11 May 2001, readers of the Berliner Zeitung were invited to participate in an ultimatum bargaining experiment played in the strategy vector mode: each participant chooses not only how much (s)he demands of the DM1,000 pie but also which of the nine possible offers of DM100, 200, …, 900 (s)he would accept or reject. In addition, participants were asked to predict the most frequent type of behavior. Three randomly selected proposer–responder pairs were rewarded according to the rules of ultimatum bargaining and three randomly chosen participants of those who predicted the most frequent type of behavior received a prize of DM500. Decisions could be submitted by mail, fax or via the internet. Behavior is described, statistically analyzed and compared to the usual laboratory ultimatum bargaining results.     

Simple Identification and Specification of Cointegrated Varma Models

We bring together some recent advances in the literature on vector autoregressive moving‐average models, creating a simple specification and estimation strategy for the cointegrated case. We show that in this case with fixed initial values there exists a so‐called final moving‐average representation. We prove that the specification strategy is consistent. The performance of the proposed method is investigated via a Monte Carlo study and a forecasting exercise for US interest rates. We find that our method performs well relative to alternative approaches for cointegrated series and methods which do not allow for moving‐average terms. Copyright © 2014 John Wiley & Sons, Ltd.     

Service Delivery Networks and Employment Relations at German Airports: Jeopardizing Industrial Peace on the Ground?

In this article, we ask how organizational restructuring towards a network form of service delivery challenges an established form of employment relations in Germany, that is labour–management collaboration. Building on a theoretical discussion of the marketization hypothesis, we develop a structuration perspective on the relationship between network restructuring and labour–management collaboration, which highlights the political economy of inter-firm networks. Empirically, we focus on two major airport authorities in Germany. Our findings show how these authorities at the core of service delivery networks face a strategic trade-off between short-term labour cost reductions and more adversarial employment relations. Apart from coinciding with a deterioration in working conditions for service workers, the handling of this trade-off depends on managers’ and worker representatives’ commitment to collaboration across the network. While unions and works councils initially continued with social partnership-type practices, the more adversarial management practices for enacting the network restructuring cause a fragmentation on the workers’ side and increase the conflict potential. We conclude that the agency of management and worker representatives in the enactment of inter-firm networks oscillates between more partnership-like and more conflictive practices, which turn the network restructuring into a political process with divergent outcomes for employment relations.