Nominal exchange rate volatility,relative price volatility,and the real exchange rate

We model real exchange rate, nominal exchange rate, and relative price volatility using real and nominal factors. We analyze these volatility measures across developing and industrialized countries. We find that the inclusion of nominal factors achieves a sizable reduction in the real exchange rate volatility spread between developing and industrialized countries. In addition, we find that nominal factors matter to real exchange rate volatility in the short run and the long run, and that for developing countries, a higher share of real exchange rate volatility stems from relative price volatility.     

Minimum wage,trade and unemployment in general equilibrium

The path‐breaking work of Card and Krueger, showing that a higher minimum wage can increase employment, turned the age‐old conventional wisdom on its head. This paper demonstrates that this apparently paradoxical result is perfectly plausible in a competitive general equilibrium production structure of a small open economy with a non‐traded good, without recourse to monopsony, spatial heterogeneity, heterogeneity of consumers and so on, the usual theoretical drivers behind the result. Following Jones and Marjit, we build a simple general equilibrium model with production complementarity and we show that a higher minimum wage can raise aggregate employment. Expansion in the non‐traded sector following a wage hike may be consistent with the overall expansion of the export sector in a multi‐good framework, an unlikely outcome in a conventional two‐good model which cannot accommodate with production complementarity.     

Simulation-based costing for early phase life cycle cost analysis: Example application to an environmental remediation project

Simulation-based costing (SBC) has been slow to be adopted by the traditional cost estimating community. This can be attributed to many factors, including complexity, how to gather data and develop probabilistic inputs, cost of SBC software, and a lack of understanding of the benefits of developing cost versus risk profiles. This article presents an overview of how SBC can be effectively utilized for early phase life cycle cost (LCC) estimation. A formal process for conducting LCC incorporating SBC is presented not only to provide a structured approach but to also convey to stakeholders how such a study is conducted. This article also presents a case study where total ownership cost versus risk profiles were developed using this proposed process in order to support budgetary and planning considerations for a large environmental remediation project. This research argues that SBC is needed during the concept exploration phase because this is when budgets are often fixed and expectations set.     

Is neuroaccounting waiting in the wings? An essay

This paper discusses a recently published handbook on neuroeconomics ( and ) and extends the discussion to reasons why this newly emerging discipline should be of interest to behavioral accounting researchers. We evaluate the achieved and potential contribution of neuroeconomics to the study of human economic behavior, and examine what behavioral accounting researchers can learn from neuroeconomics and whether we should expect to see a similar sub-field emerge within behavioral accounting in the near future. We conclude that a separate sub-field within behavioral accounting is not likely in the near future due mostly to practical reasons. However, the behavioral accounting researcher would do well to follow research in this discipline closely, and behavioral accountants in the near future are likely to collaborate with neuroscientists and neuroeconomists on questions of mutual interest.     

A categorical modeling approach to analyzing new product adoption and usage in the context of the building-materials industry

A high proportion of non-adopters is prevalent in any market where the product under consideration is relatively new or has a low acceptance rate. This results in a low proportion of adopters in a representative sample. In adoption or product usage modeling such high proportion of zeros in the dependent variable may be addressed by zero-inflated models, by modeling the product adoption and usage as a function of two latent processes. This paper considers a zero-inflated ordinal-probit model for investigating adoption and usage of innovative wall-cavity insulation materials among residential homebuilders in the US. This study assumes a three-step adoption process of innovative housing materials, namely, trial adoption, intermediate adoption and complete adoption. The study uses 5757 responses from a combined ‘Annual Builder Practices Survey’ dataset comprising ten cross-sectional yearly surveys, undertaken by the NAHB Research Center, from 1996 to 2005. The research results indicate that though a higher proportion of large firms are more likely to adopt innovative insulation material, they continue using established products while slowly increasing their use of the innovative material over time. However, when smaller homebuilders adopt an innovative insulation material, it replaces the existing product from their material usage portfolio at a faster rate.