Fluctuations in the foreign exchange market: How important are monetary policy shocks?

We study the effects of U.S. monetary policy shocks on the bilateral exchange rate between the U.S. and each of the G7 countries. We also estimate deviations from uncovered interest rate parity conditional on these shocks. The analysis is based on a structural vector autoregression in which monetary policy shocks are identified through the conditional heteroscedasticity of the structural disturbances. Unlike earlier work in this area, our empirical methodology avoids making arbitrary assumptions about the relevant policy indicator or transmission mechanism in order to achieve identification. At the same time, it allows us to assess the implications of imposing invalid identifying restrictions. Our results indicate that the nominal exchange rate exhibits delayed overshooting in response to a monetary expansion, depreciating for roughly ten months before starting to appreciate. The shock also leads to large and persistent departures from uncovered interest rate parity. Variance-decomposition results indicate that monetary policy shocks account for a non-trivial proportion of exchange rate fluctuations.     

Dove or Hawk? Characterizing monetary policy regime switches in India

The past two decades have witnessed a worldwide move by emerging markets to adopt explicit or implicit inflation targeting regimes. A notable and often discussed exception to this trend, of course, is China which follows a pegged exchange rate regime supported by capital controls. Another major exception is India. It is not clear how to characterize the monetary regime or identify the nominal monetary anchor in India. Is central bank policy in India following a predictable rule that is heavily influenced by a quasi inflation target? And how has the monetary regime been affected by the gradual process of financial liberalization in India? To address these points, we investigate monetary policy regime change in India using a Markov switching model to estimate a time-varying Taylor-type rule for the Reserve Bank of India. We find that the conduct of monetary policy over the last two decades can be characterized by two regimes, which we term ‘Hawk’ and ‘Dove.’ In the first of these two regimes, the central bank reveals a greater relative (though not absolute) weight on controlling inflation vis-à-vis narrowing the output gap. The central bank however was found to be in the “Dove” regime about half of our sample period, focusing more on the output gap and exchange rate targets to stimulate exports, rather than moderating inflation. India thus seems to be following its own direction in the conduct of monetary policy, seemingly not overly influenced by the emphasis on quasi-inflation targeting seen in many emerging markets.     

What does the new long-run monetary policy framework imply for the path ahead?

Business Economics - Following a lengthy review, the FOMC recently revised its long-run monetary policy strategy statement, largely in recognition of the persistent threat the effective lower bound...     

Are services advertised differently? An analysis of the relationship between product and service types and the informational content of their advertisements

This study examines the informational content of service and product advertisements and analyses the relationship between the amount and type of information in an advertisement and the type of product or service being advertised. The influence that service characteristics have on advertising strategy is still not well understood. One theory is that services need to be more tangible in order to assist in the consumer decision-making process and advertising can assist with this by providing factual information. The purpose of this paper is to establish whether this theory is recognized and adopted in advertising practice. This is achieved by performing a content analysis. The results indicate that product advertisements contain more information than services, which indicates a discrepancy between advertising theory and practice. The results also prove that there are variances in the amount and type of information included in product and service advertisements. The paper examines these variances and applies existing classification frameworks to explain them. Areas for further research are also identified.     

Understanding the flow of health policy in the United States: self-interest or ignorance?

Health policy decisions are made in an uneven manner, eluding attempts to explain developments with a coherent theory. Numerous explanations have been suggested to explain individual policy actions, but recently Feldstein has attempted a broader formulation. This Self-Interest Model of Health Policy, however, assumes full knowledge of a policy's benefits and costs. This is an unrealistic assumption, and the model is unable to explain important decisions that have been made in three areas: insurance for long-term care, universal access, and efficiency incentives. This article presents a broader, more powerful formulation of the Feldstein model, specifically incorporating public ignorance as a policy determinant. The vital role of education and health policy research is underscored.     

Is export promotion effective in developing countries? Firm-level evidence on the intensive and the extensive margins of exports

How effective are export promotion activities in developing countries? What are the channels through which export promotion affects firms' exports, the intensive margin or the extensive margin? Empirical evidence in this respect is scarce. We aim at filling this gap in the literature by providing evidence on the impact of export promotion on export performance using a unique firm-level dataset for Peru over the period 2001-2005. We find that export promotion actions are associated with increased exports, primarily along the extensive margin, both in terms of markets and products. This result is robust across alternative specifications and estimation methods.     

Is the learning community of economics and accounting effective? Empirical assessment of class achievements

Learning communities are increasingly used at colleges and universities, as one of the goals of a learning community is to increase interaction among students and teach them how to apply knowledge. The goal of this research is to assess the learning community of the economics and accounting students in their class performance measured by class grades. By controlling individual characteristics (e.g., gender, high school performance, First Year Experience program) and class-related characteristics (e.g., instructor and major), the authors found that the learning community of economics and accounting, which is organized into both economics and accounting classes on a back-to-back basis, is no more effective for class grades than for non–learning community students.     

How Large Is the Risk of Stagflation in the Eurozone?

The rapid recovery of demand combined with supply constraints has led to rising prices during the past months. This is evident in oil and gas markets, but also in international trade, which has been thrown out of step by bottlenecks at Asian ports. This situation creates a trade-off for the European Central Bank, because a more expansionary monetary policy cannot mitigate the supply bottlenecks and supply-side restrictions, while a more restrictive monetary policy would slow down the economic recovery. For this reason, key interest rate hikes in the eurozone are not to be expected for 2022. If the supply-side factors become persistent and wage policy tries to pass the price effects on, monetary policy will be forced to become restrictive.

     

Changes in the Structure of China''''s Net Users

AccordingtotheReportontheStatisticsoftheDevelopmentofChina'sInternet,byJanuary1,1999Chinahad2.1millionnetusers,andthefigurerosetofourmillionbyJuly1,1999.StatisticsonJanuary1,2000showedthatthenumberofChina'snetuserssurpassed8.9million.AcomparisonbetweentheReportofJuly1999andtheReportofJanump2000,revealsthat4.9mil1ionmorenetusersinChinaappearedinthelattef,andananalysisofthisfigurerevealsthegreatchangesinthestructureofChina'snetusers.SexThedifferenceinsexesisstil1bigwithmalenetusersinadomi…     

Can monetary policy survive policy model mis‐specification? Model uncertainty and the perils of “policy model complacency”

The question addressed in this paper is: can monetary policy succeed in stabilizing the economy even when the policy model on which it is predicated is mis‐specified? Using variants of the 3‐equation macroeconomic model, it is shown that this question can be answered in the affirmative. The purpose of the paper is not to encourage indifference toward model uncertainty, however, but rather to warn against the perils of “policy model complacency.” This arises if the success of policy is misinterpreted as successful understanding of the workings of the economy, which makes the policy maker vulnerable to surprises: events with systematic origins in the “true” model of the economy that are not anticipated by the (mis‐specified) policy model. To safeguard against this problem, policy makers should always entertain eclectic views of the workings of the economy. This task is easily accomplished by paying attention to heterodox macroeconomics, which frequently makes predictions that are very much at variance with those of the dominant policy model.     

Why Is the Progress of Marketisation Slow in Russia?

Summary

The paper highlights economic and socio-cultural conditions representing constraints for marketisation of Russia and explains why marketisation has been out of step with other highly significant macro- and microeconomic developments. Marketisation is unlikely to make headway unless economic conditions and market requirements will make its importance unequivocal to all market agents. Standard marketing techniques and activities require appropriate adaptations in an ideologically neutral manner. Consequently, the transfer of know-how may play only a very limited role following the discrepancy in business conditions in developed market economies and transition economies.     

Are changes in spreads of external-market debt also induced by contagion?

As governments and private companies from emerging markets have increasingly issued foreign-currency denominated debt through the 1990s, the economies concerned have become more vulnerable to abrupt changes in sovereign risk. At the same time, with closer economic integration countries have become more likely to be affected by economic problems that arise in neighboring countries. The following article uses the example of four Latin American countries to evaluate empirically the extent to which “contagion” explains changes in sovereign risk.     

Is the Country of Origin the Fifth Element in the Marketing Mix of Imported Wine?

Abstract

The research builds a theoretical understanding and managerial debate of country of origin effects for agricultural produce for which the growing country and region have been regarded as important bases for differential advantage. Especially, it is focused in the wine industry, which has faced unprecedented competitive marketing challenges over the last decade.     

Is Beauty in the Aisles of the Retailer? Package Processing in Visually Complex Contexts

Visual appeal is an important consideration in the design of brand packages because attractiveness guides behavior. The visual complexity of a context (i.e., the quantity, irregularity, detail, and dissimilarity of objects) in which a retailer displays a package may impact its attractiveness by influencing attention and processing fluency. Employing consumer samples, and stimuli ranging from the abstract to the realistic, three studies provide evidence that people process a package more fluently, thus increasing its attractiveness, when it is presented in a low rather than high complexity context. This effect is more pronounced with inherently appealing packages, and with people who are more field-dependent or pursuing utilitarian shopping goals. Study 1 establishes effects by employing psychometric measures and abstract stimuli; study 2 corroborates findings with another product category and realistic stimuli; and study 3 complements psychometric measures with eye tracking data to demonstrate that visually more complex contexts divert viewer attention, hereby lowering processing fluency and target attractiveness. The authors discuss the theoretical contribution and strategic insights the research provides for retailers, brand managers, and designers.     

On the crisis of the “liberalization policy” in the economics of interdependence

In spite of all protestations and exhortations it is a fact that trade liberalization, the modern version of free trade, is caught in a crisis. Professor Detlef Lorenz is here analysing the causes of this crisis and suggesting alternatives for a future liberalization policy.     

Will the startup succeed in your eyes? Venture evaluation of resource providers during entrepreneurs' informational signaling

Experienced founders and investors are arguably the venture community members most likely to possess needed financial and social resources for startups. We present a model of venture evaluation where entrepreneurs solicit these resource providers for needed financial and social resources. Our model addresses how resource providers' venture investment propensity influences their evaluation of entrepreneurs' informational signals and how their venture evaluation predicts their willingness to provide financial and social resources. We test our model using real-time decisions and find resource providers with founding experience (both non-investor founders and investors with founding experience) leverage their investment propensity more than non-founder investors when evaluating new ventures. In addition, our post-hoc analysis reveals that resource providers' founding experience is associated with their willingness to confer social resources. Overall, this paper focuses on the perspective of resource providers and addresses how their investment propensity, types of venturing experience, and venture evaluation influence their willingness to render resource support to new ventures.     

The ineffectiveness of entrepreneurship policy: is policy formulation to blame?

Entrepreneurship policy has been criticised for its lack of effectiveness. Some scholars, such as Scott Shane in this journal, have argued that it is ‘bad’ public policy. But this simply begs the question why the legislative process should generate bad policy? To answer this question this study examines the UK’s enterprise policy process in the 2009–2010 period. It suggests that a key factor for the ineffectiveness of policy is how it is formulated. This stage in the policy process is seldom visible to those outside of government departments and has been largely ignored by prior research. The application of institutional theory provides a detailed theoretical understanding of the actors and the process by which enterprise policy is formulated. We find that by opening up the ‘black box’ of enterprise policy formulation, the process is dominated by powerful actors who govern the process with their interests.     

Where Is the Economic Center of the West?

The China Western Forum 2000was held from 20 to 22 Octoberin Chengdu. Twenty policiesencouraging investment in the west wereput forward, and the western developmentwas further accelerated.Will Chengdu the No.4 City inChina?There are three generally acceptedmetropolises in China: Beijing, Shanghaiand Guangzhou.In a new round of competition, whichcity will become the No.4 after Beding,Shanghai and Guangzhou?Western cities are longing for thisposition.On the vast 56% of Chinese land inthe…     

Changes of Australia''''s Cultural Policy in the 20th Century

1.The assimilation phase1.1Background From the19th century up to the Second World War,with the vast majority of immigrants coming from Britain and Ireland,Australia was able to maintain the racial purity and remain a monocultural nation.After the Second World War,with fewer and fewer immigrants coming from the most preferential nations,the Australian government,aware of growing needs for labor in the manufacturing sector and of the declining birth rate,embarked on an ambitious immigration …