Would the Bundesbank have prevented the Great Inflation in the United States?

Policy counterfactuals based on estimated structural VARs routinely suggest that bringing Alan Greenspan back in the 1970s United States would not have prevented the Great Inflation. We show that a standard policy counterfactual suggests that the Bundesbank—which is near-universally credited for sparing West Germany the Great Inflation—would also not have been able to prevent the Great Inflation in the United States.The implausibility of this result sounds a cautionary note on taking the outcome of SVAR-based policy counterfactuals at face value, and raises questions on the reliability of such exercises.     

Sequencing the COVID-19 Recession in the USA: What Were the Macroeconomic Drivers?

We apply a structural vectorautoregressive analysis to decompose fluctuations in the growth rate of industrial production and inflation precipitated by the COVID-19 pandemic in the USA into aggregate demand, aggregate supply, and uncertainty shocks. While all three types of shocks contributed to output and inflation dynamics, the surge in economic uncertainty contributed to the decline in output more strongly than aggregate demand or aggregate supply disruptions. In 2021, the decline in uncertainty and adverse aggregate supply shocks emerged to be similarly important in spurring inflation.     

Symposium: Youth labour market and the “Great Recession”

The financial crisis of 2007–2008, followed by the “Great Recession” and the additional sovereign debt crisis in some peripheral countries of the Eurozone, resulted in huge and persistent effects on European youth labour markets. Theoretical and empirical investigations on this topic are still scarce compared with the importance of the topic and the consequent economic, social and policy implications. This paper consists of a very short introduction to a symposium that contributes to filling that gap. A multifaceted picture emerges with major policy implications for the three levels of government (European, national and regional/local) in order to reduce youth unemployment and the NEET phenomenon.     

Impact of the Great Recession on unemployed and NEET individuals’ labour market transitions in Ireland

The impact that the Great Recession has had on countries’ labour markets has been well documented. In Ireland, the contraction in economic activity that took place resulted in the country's overall unemployment rate increasing from 4.6% in 2006 to 15% in 2012. The country's youth unemployment rate rose from 9.9% to 33% over the same time period, while the proportion of NEETs increased from 10.1% in 2006 to 18.7% in 2012. Policymakers are aware of the unemployment rates of young and prime-aged people as well as the NEETs rate. However, little is known about these groups’ profiles, whether their profiles have changed since the recession and also their labour market transition patterns pre and post the Great Recession. Given the importance of this information in the design of effective activation measures to assist unemployed and NEET individuals, this paper examines each of these issues in turn. Overall, the study found for all three groups examined that the rate of transition to employment fell dramatically between 2006 and 2011. The analysis showed that the drop in the groups’ transition rates was not due to changes in the underlying sub-group population structures but to changes in the external environment that resulted in the impact of possessing certain characteristics changing over the recession. For example, education and nationality have become more important in finding a job in Ireland over the course of the recession, while there has been a fall in the scarring impact of unemployment durations.     

The joint impact of labour policies and the “Great Recession” on unemployment in Europe

The paper consists of an empirical analysis of the separate as well as joint impacts on total and youth unemployment of indicators of labour market policies on the one hand, and the financial crisis associated with the “Great Recession” on the other. In particular, we investigate labour market data in the past two decades for the Enlarged Europe and adopt a variable accounting for the idiosyncratic severity shock of the crisis. This time-varying and country-specific crisis variable enables us to test empirically and in a novel way the joint impact of labour market policies and the economic crisis on labour market dynamics even when accounting for common macro shocks.     

How do socially controversial companies do during a stressful time? Evidence from the Great Recession

This study investigates the performance of socially controversial companies during a financial crisis. Companies are usually considered controversial if they are involved in controversial businesses such as alcohol, tobacco, firearms, nuclear etc. The results show that controversial firms exhibit higher firm value as well as better accounting performance during the Great Recession than otherwise similar, albeit non-controversial, firms. The results are consistent with the notion that the demand for controversial products remains relatively stable even during a stressful time. Further analysis confirms the results, including random-effects analysis, GMM dynamic panel data analysis, and instrumental-variable (IV) analysis. The results of this paper are particularly relevant to portfolio management, where controversial firms may be added to portfolios to inoculate them from a negative shock brought about by an economic crisis.     

What is the globalisation of inflation?

This paper studies the globalisation of CPI inflation by analysing core, energy and food components, testing for structural breaks in the relationships between domestic inflation and a corresponding country-specific foreign inflation series at the monthly frequency for OECD countries. The iterative methodology employed separates coefficient and variance breaks, while also taking account of outliers. We find that the overall pattern of globalisation in aggregate inflation is largely driven by convergence of the mean levels of the core component from the early 1990s, compatible with the introduction of inflation targeting in many countries of our sample. There is less evidence of increased synchronisation of shortrun movements in core than aggregate inflation, but an increased role for shortrun foreign energy inflation often contributes to the globalisation effect.     

What Is the Economic Meaning of FDH?

The central feature of the FDH model is the lack of convexity for its production possibility set, TF. Starting with n observed (distinct) decision making units DMU_k , each defined by an input-output vector p _k = [y _k -x _k], domination is defined by ordinary vector inequalities. DMU_k is said to dominate DMU_j if p _k ≥ p _j , p _k ≠ p _j . The FDH production possibility set TF consists of the observed DMU_j together with all input-output vectors p=[y_k,?x_k] with y ≥ 0, x ≥ 0, y ≠ 0, x ≠ 0 which are dominated by at least one of the observed DMU_j. DMU_k is defined as “FDH efficient” if no DMU_j dominates it. In the BCC (or variable return to scale) DEA model the production possibility set TB consists of the observed DMU_k together with all input-output vectors dominated by any convex combination of them and DMU_k is DEA efficient if it is not dominated by any p in TB. In the DEA model, economic meaning is established by the introduction of (non negative) multiplier (price) vectors w = [u,v]. If DMU_k is undominated (in TB) then there exists a positive multiplier vector w for which (a) w ^T p _k = u ^T y _k ? v ^T x _k ≥ w ^T p for every p ∈ TB. In everyday language, the net return (or profit) for DMU_k relative to the given multiplier vector w is at least as great as that for any production possibility p. On the other hand, if DMU_k is FDH but not DEA efficient then it is proved that there exists no positive multiplier vector >w for which (a) holds, i.e. for any positive w there exists at least one DMU_j for which w ^T p _j > w^T p _k . Since, therefore, FDH efficiency does not guarantee price efficiency what is its economic significance? Without economic significance, how can FDH be considered as being more than a mathematical system however logically soundly it may be conceived?

     

What Can We Learn From Great Business Leaders?

There are many leadership lessons that can be extracted from the lives of great business leaders like John D. Rockefeller, Henry Ford, Alfred Sloan, Sam Walton, Jack Welch, A. G. Lafley, Steve Jobs, and Bill Gates. Although different in personality and style, these leaders showed talent at a very young age, persevered in achieving their goals, surrounded themselves with the best people they could, worked hard and with great discipline, had great confidence in themselves, and were creative and innovative in managing their businesses.     

What Do Cities Have to Do with Democracy?

The relationship between urbanization and democratization remains under‐theorized and under‐researched. Radical urban theory has undergone a veritable normative turn, registered in debates about the right to the city, spatial justice and the just city, while critical conceptualizations of neoliberalism present ‘democracy’ as the preferred remedy for injustice. However, these lines of thought remain reluctant to venture too far down the path of political philosophy. The relationship between urban politics and the dynamics of democratization remains under‐theorized as a result. It is argued that this relationship can be usefully understood by drawing on lessons from avowedly normative styles of political theorizing, specifically post‐Habermasian strands of critical theory. Taking this tradition seriously helps one to notice that discussions of urbanization, democracy, injustice and rights in geography, urban studies and related fields invoke an implicit but unthematized democratic norm, that of all‐affected interests. In contemporary critical theory, this norm is conceptualized as a worldly register of political demands. It is argued that the conceptual disaggregation of component values of democracy undertaken through the ‘spatial turn’ in recent critical theory reorients the analysis of the democratic potentials of urban politics around the investigation of the multiple forms of agency which urbanized processes perform in generating, recognizing and acting upon issues of shared concern.     

What influences the progression of employment rights disputes?

This study of employment rights disputes in New Zealand accessed all parties to 14 disputes. Despite a legislative requirement to preserve relationships, only three survived. Dispute type, interaction mode and the parties' relative influence affected outcomes. These findings have implications for managers and policy makers regarding alternative dispute resolution systems.     

What is the meaning of ‘talent’ in the world of work?

The ongoing confusion about the meaning of ‘talent’ within the world of work is hindering the establishment of widely accepted talent management theories and practices. The aim of this paper is to contribute to the literature on talent management by offering an in-depth review of the talent concept within the specific context of the world of work, and proposing a framework for its conceptualization. We group different theoretical approaches to talent into ‘object’ (i.e., talent as natural ability; talent as mastery; talent as commitment; talent as fit) versus ‘subject’ approaches (i.e., talent as all people; talent as some people) and identify dynamics existing within and between them, as well as implications for talent management theory and practice. Finally, we discuss different avenues for further research aimed at developing the talent—and consequently, the talent management—construct further.     

What is the role of the asking price for a house?

This paper considers the role of the asking price in housing transactions both theoretically and empirically. Significant fractions of housing transactions involve sales prices that are either below or above asking price, which might suggest that asking price has limited relevance. However, many housing transactions involve a sales price exactly equal to asking price (a fact that has previously drawn little notice), strongly suggesting that asking price does matter. The paper develops a model where asking price is neither a binding commitment nor a ceiling, yet still directs buyer search and impacts sales price. Using novel survey data, the paper provides empirical evidence consistent with asking price playing a directing role in buyer search. Consistent with theory, this effect is stronger for more atypical houses and in bust markets.     

What Factors Affect the Persistence of an Innovation Advantage?

Factors that affect a firm's ability to achieve an advantage may differ from those that affect its ability to sustain that advantage. Moreover, if advantage is a relative concept then studies that relate resource stocks to ‘absolute’ outcomes say little about how resources contribute to enduring differences among firms. We explore these issues in the global semiconductor industry by analyzing how a firm's resource stocks contribute to the persistence of an innovation advantage (a relative outcome). The findings demonstrate that a firm's own production experience and the experience held by its partners contribute to temporary innovation advantages. The results also show that a firm's own production experience yields a more durable innovation advantage as compared to the experience held by a firm's partners and that the experience held by a firm's partners provides a more enduring advantage than a firm's patent stock.     

What is the value of an IT e-procurement system?

E-procurement is gaining in popularity in business practice and its benefits encourage its adoption for a variety of areas, including IT (Information Technology) purchases. The problem with assessing the value associated with e-procurement has been addressed by researchers and practitioners, but a clear methodology to determine the benefits related to e-procurement adoption is still missing, especially for IT. This paper defines e-procurement and identifies the six most significant drivers for e-procurement adoption, which are the pillars of the proposed value assessment methodology. The authors have also applied the developed methodology to real cases in order to verify its validity and robustness. Finally, although the developed model takes into account the peculiarities of IT purchases, it also raises more research opportunities for other purchasing categories.     

COVID-19 crisis and the efficiency of Indian banks: Have they weathered the storm?

The purpose of this study is to determine whether Indian banks were able to weather the COVID-19 storm. We estimate banks’ deposits-generating and operating efficiencies using a two-stage directional distance function-based network data envelopment analysis (DDF-NDEA) approach and seek to capture the immediate impact of COVID-19 on these efficiency measures by comparing their magnitudes in the pre-pandemic (2014/15–2019/20), just 1-year prior to the pandemic (2019/20), and during the pandemic year (2020/21) periods. The study looks at whether the impact of the COVID-19 pandemic was uniform across ownership types and size classes. The empirical findings suggest that the Indian banking system was resilient and withstood the immediate impact of the COVID-19 pandemic. During the study period, however, the large and medium-sized banks experienced some efficiency losses. By and large, regardless of bank group, banks have shown resilience to the shock of the global health pandemic and improvements in efficiency.     

How beneficial was the Great Moderation after all?

This paper computes the welfare effect of the Great Moderation, using a representative-agent consumption-based asset pricing model. The Great Moderation is modeled according to the data properties of consumption and dividend growth rates, which display a reduction of their innovation-volatility and increased persistence: the latter is a characteristic that has been largely unaddressed in the literature. The theoretical model (a long-run risk model) is calibrated to match average asset pricing variables, as well as consumption and dividend dynamics before and during the Great Moderation. The model captures the relevant features of the Great Moderation (decreased variance, increased persistence, asset prices). It predicts only a modest welfare gain from Great Moderation (0.38 percent in consumption equivalent), due mainly to the utility cost of a late uncertainty resolution.     

What are the predictors of nonprofit association members' supportive behaviors?

This study investigates the factors of members' supportive behavioral intentions to donate and recommend membership to others in the context of engineering professional membership associations. Using data collected from 3,464 members across three engineering professional membership associations, this study found that age, past donation experience, personal and professional benefits, gender, income, and longevity in the field were significant factors to determine giving intention, while personal benefits, professional benefits, past behaviors (donation and volunteering), and longevity in the field were predictors of membership recommendation intentions of engineering professionals.