Weak Identification of Forward‐looking Models in Monetary Economics*

Recently, single‐equation estimation by the generalized method of moments (GMM) has become popular in the monetary economics literature, for estimating forward‐looking models with rational expectations. We discuss a method for analysing the empirical identification of such models that exploits their dynamic structure and the assumption of rational expectations. This allows us to judge the reliability of the resulting GMM estimation and inference and reveals the potential sources of weak identification. With reference to the New Keynesian Phillips curve of Galí and Gertler [Journal of Monetary Economics (1999) Vol. 44, 195] and the forward‐looking Taylor rules of Clarida, Galí and Gertler [Quarterly Journal of Economics (2000) Vol. 115, 147], we demonstrate that the usual ‘weak instruments’ problem can arise naturally, when the predictable variation in inflation is small relative to unpredictable future shocks (news). Hence, we conclude that those models are less reliably estimated over periods when inflation has been under effective policy control.     

Work and Welfare in Economics:

Abstract . Today's conventional economics typically ignores the impact of alternative forms of work organization upon the welfare of the worker. In effect, its methodology is concerned with the welfare of the individual as a consumer, but not with the welfare of the individual as a worker. Hence, welfare conclusions of economics are subject to challenge on grounds of being incomplete. Whether the worker is alienated or achieves self-fulfillment, etc., stands in no necessary relationship to either the formal lines of enterprise ownership, political ideology or form of economic system. Questions of authority and power in work organizations and the workplace conditions affecting the worker on the job transcend them.     

Spreading the Word: Transaction Cost Economics in the Conversation of Economics

Transaction cost economics is a key topic in many conversations in business and economics related disciplines, much as a result of Oliver Williamson's intellectual crusade. By claiming a “distinct worldview,” he develops arguments of association and differentiation to established worldviews, like traditional microeconomics, earlier institutionalism, Austrian and radical economics, and also within the new institutional economics itself, in order to advance his theory. His resourcefulness defies straight argumentative decisions, catering to different audiences whilst trying to break new ground. Surely Williamson has not pleased everyone, but his discourse is greatly responsible for placing TCE in the everyday parlance of economics.     

Workgroup Climates and Employees’ Counterproductive Work Behaviours: A Social‐Cognitive Perspective

This research examines employees' anticipation of social and self‐sanctions as a self‐regulatory mechanism linking workgroup climates and counterproductive work behaviours (CWBs) and personality as a limit to these effects. A cross‐level study with 158 employees from 26 workgroups demonstrated that in groups with a high compliance climate – a climate emphasizing the importance of complying with organizational rules – employees anticipate more social and self‐sanctions, leading those low in conscientiousness and low in agreeableness to engage less frequently in CWBs. In contrast, a high relational climate – a climate emphasizing the importance of positive social relations over self‐interest – indirectly unbridles the CWBs of these employees by alleviating the social and self‐sanctions they anticipate for CWBs. Climates did not have indirect effects for employees high in agreeableness and high in conscientiousness. These findings elucidate why workgroup climates do not affect the CWBs of all members in the same way.     

The Impact of Gender Similarity on Employee Satisfaction at Work: A Review and Re‐Evaluation*

abstract We used data from the British 1998 Workplace Employee Relations Survey (WERS98) to examine key unanswered questions about the impact of gender similarity on employee satisfaction at work. The study sample consisted of 11,848 men and 11,278 women from over 1700 workplaces across Britain. In line with gender‐specific compositional arguments, the effects of gender similarity were found to be asymmetrical for men and women, with similarity tending to have a greater positive impact on men than on women. The effects involved were primarily linear in nature. Net of the potentially confounding influence of other factors, they were also found to be quite weak, weaker than has commonly been suggested in the literature.     

Globalization: Beyond the Ultra‐modernist Narrative to a Critical Realist Perspective on Geopolitics in the Cyber Age

Globalization is the new master concept beloved of media commentators. But already there is great discontent among social scientists with the content and use of this concept. In the space of less than a decade globalization discourse and research has moved well past the stage of invocation of a ‘buzzword’, of obeisance to the power of the internet and global finance, or of predictions of the demise of the state. These are all features that can readily be discerned still in the press and among politicians and hyperglobalizing advertisers and finance‐sector ‘gurus’. These groups seem still to be locked into the first wave of globalization euphoria consequent upon the supposed ‘triumph’ of capitalist neoliberalism after the collapse of communism and the slightly later advent of the internet. Second and third waves of enquiry have since arisen in which scepticism about globalization (in the second) is giving way to more detailed empirical enquiry into the actual processes and transformations that might or might not be occurring. We need a new critical perspective that is able to place globalization as the latest form of an older discourse on modernity and capitalism and which is able to move well beyond the over simplification of the present. Through a critical realist perspective we can begin to develop a more empirically powerful criticism of geopolitics and political economy and begin to see the possibilities of local empowerment in the face of the rhetoric and politics of the hyperglobalizing project. La mondialisation est le nouveau concept de prédilection des médias. Mais déjà, sa teneur et son usage suscitent un mécontentement considérable dans le milieu des sciences sociales. En moins d'une décennie, discours et recherches sur la mondialisation ont largement dépassé l'invocation d'un mot à la mode, l'hommage rendu à la puissance d'Internet et de la finance mondiale, ou les prédictions du recul de l'État. On perçoit encore facilement tous ces traits dans la presse et chez les hommes politiques, les publicitaires hyper‐mondialisateurs et les ‘gourous’ de la finance; en effet, ces groupes restent bloqués, semble‐t‐il, au stade de la première vague d'euphorie liée au phénomène né du soi‐disant ‘triomphe’ du néolibéralisme capitaliste après l'effondrement du communisme et l'arrivée presque simultanée d'Internet. Sont apparues depuis une deuxième puis une troisième vague d'investigations; le scepticisme à l'égard de la mondialisation (dans la deuxième) y fait place à une étude empirique plus détaillée sur les processus et transformations réels qui pourraient ou non voir le jour. Nous avons besoin d'une nouvelle perspective critique qui permette de positionner la mondialisation comme la forme la plus récente d'un discours antérieur sur la modernité et le capitalisme, et d'aller outre la simplification excessive qui nous connaissons actuellement. Grâce à une approche réaliste, nous pouvons commencer àélaborer une critique de géopolitique et d'économie politique plus solide sur le plan empirique, et à distinguer les possibilités d'attributions de pouvoirs à un niveau local, en dépit des discours et de la politique caractéristiques du projet d'hyper‐mondialisation.     

Equity‐Liabilities Distinction: The case for Co‐operatives*

Members' shares in co‐operative entities are financial instruments with particular characteristics. In this paper we analyse the relation between firm leverage and systematic risk to provide empirical evidence on the economic substance of the member shares of members of cooperatives. We have studied the characteristics of members' shares in six European countries: France, Germany, Italy, Portugal, Spain and United Kingdom. We have also conducted tests on co‐operatives of these countries over the period 1993–2005. The study reports that in global terms the economic substance of the redeemable part of equity in co‐operatives is not the same across countries. Therefore if accounting standards setters want to develop a global standard for co‐operatives, a recommendation derived from this study would be to follow a probabilistic model to classify the redeemable part of co‐operative financial instruments, where the entity does not have the unconditional right to refuse the redemption, or to report this part as an intermediate item with characteristics of debt and equity.     

The Thirteenth‐Century Economics of Thomas Aquinas

In the Middle Ages, discourse on economics, such as it was, proceeded for the most part as an application of theological doctrine. But economic analysis as an independent discipline per se was taking shape in thirteenth‐century scholasticism. This is shown by a review of relevant sections of Thomas Aquinas’ Summa theologiae regarding property rights and the division of labour; wealth and income policies; consumer protection and fair trade; and the distinction between usurious and licit financial returns.     

The Triple Bottom Line: A Critical Review from a Transdisciplinary Perspective

The triple bottom line (TBL) has reformed management discourse by making sustainability part of the business agenda, yet increasingly the TBL has evolved into a proxy for sustainability, often visually depicted as the mutual maximization of economic, social and environmental dimensions. We use a sentiment analysis to show that the extant literature views the TBL favorably and uncritically, with only 8% of academic studies invoking the term negatively. Next, based on extant management literature, we show that two core assumptions underpin the TBL metaphor: win–win and firm‐level sustainability. Then we employ a transdisciplinary comparative analysis to contrast these assumptions with two ecological perspectives: strong sustainability and nested hierarchy. By drawing extensively from the literature of ecologically grounded sciences, our study contributes a critical evaluation of the TBL paradigm of sustainability.     

Expanding the Tension‐Reduction Model of Work Stress and Alcohol Use: Comparison of Managerial and Non‐Managerial Men and Women*

abstract The tension‐reduction model that links workplace stress to alcohol use and problems has received mixed support in previous investigations. Following recommendations that this model include moderated mediated relationships ( Frone, 1999 ) using more specific forms of workplace stress, we examine the impact of gender ratio, generalized workplace abuse, and stereotype threat in an effort to predict alcohol use and problems particularly for managerial women. A total of 1410 (57 per cent response rate) employees completed a survey containing items on job stress, escapist reasons for drinking, and alcohol consumption and problems, and SEM analyses were conducted separately for managerial and non‐managerial men and women. Results revealed that: (a) these three workplace stressors were differentially related to general workplace stress for the four groups; and (b) the contributions of the three stressors and of general work stress to the alcohol‐related variables varied by group.     

Health in Organization: Towards a Process‐Based View*

abstract This paper reports on a collaborative project involving organization scholars and clinicians to examine the ways in which individual and organizational health are conceptualized in the literature. We illustrate how the use of systems theories (in this case complexity theory) in relation to organizational health introduces problems such as the risk of promoting organizational health at the expense of individual well‐being. The phenomena of organizational health and individual health are often presented as having a symbiotic relationship and we suggest some circumstances where this is not the case. Our central argument is that we need to move beyond current conceptual limitations and move towards a more process‐based model of health in organization rather than organizational health.     

Institutions and Wage Determination: a Multi‐country Approach*

We present an empirical analysis of the determinants of labour cost in OECD countries, with particular reference to the impact of labour market institutions from 1960 to 1994. We show that labour market regulations can explain a large part of the labour cost rise in OECD countries in the last few decades once we control for productivity. These results are consistent with the findings of a companion paper [ Nickell, Nunziata and Ochel (2005) Economic Journal, Vol. 115, pp. 1–27] where the effects of institutions on unemployment are examined. We present also a discussion of the econometric issues related to the estimation of a macro pooled model like ours. We focus, among other things, on the hypothesis of poolability and on the cointegration properties of the model. The explanatory power of the model is finally tested by means of a series of country by country dynamic simulations.     

The Market Concept: A Characterization from Institutional and Post‐Keynesian Economics

The neoclassical concept of the market is built on a number of assumptions that lead one to view it as a type of ether, devoid of any institutional content. In opposition to this point of view, this article proposes an alternative characterization of markets based on the fundamental principles of institutional and post‐Keynesian economics. After reviewing the main features that characterize the behavior of economic agents, we analyze the set of interrelations between these agents within markets and the role of institutions in the regulation of these interrelations. Finally, we discuss some of the consequences generated by the institutional dimensions of markets with regard to their origins and evolution, the justification for their existence, or the evaluation of their results.     

The Historical Roots of CIA‐Hollywood Propaganda

The ability to use movies that tell persuasive stories is a powerful tool, particularly if it is consciously used to legitimize war, assassination, and illegal activities and to undermine the core principles of democracy. The U.S. Central Intelligence Agency (CIA) and the U.S. military have made use of that tool for almost a century, starting with the War Department's quiet support for the movie Birth of a Nation in 1915 and continuing for a century, including such recent CIA‐supported products as Homeland, The Agency, The Recruit, and many less likely movies and television shows. During World War II, this sort of propaganda was openly distributed, since there was a widespread consensus in support of that war. However, state‐sponsored propaganda in the form of Hollywood movies continued throughout the Cold War up to the present. The production of movies that completely distorted the political meaning of George Orwell's and Graham Greene's novels were important examples of this practice. CIA involvement was covert, since the target audience was the American public and the ideological perspective being propagated often ran counter to democratic ideals. This article recounts the history of the process by which Americans came to accept the ideas continuously promoted by the government, often without knowing that their favorite movies and television shows had been vetted or even altered by agents of the CIA or the Pentagon. Since these practices violate federal laws, the public at least has a right to know that we are being subjected to this sort of propaganda and how much tax money is spent to produce entertaining forms of disinformation.     

The Failure of the Sport7 TV‐channel: Controversies in a Business Network*

ABSTRACT During 1996, TV viewers in the Netherlands witnessed the rise and fall of Sport7: a dedicated sports TV channel. Apparently, Sport7 did not succeed to become part of the business network of television and sports. This paper describes and explains why the venture failed. It builds on earlier insights from research on the outcomes of joint ventures and the business networks perspective. These insights are combined and utilized within the framework of the theory of social becoming ( Sztompka, 1991 ). As such, for a new venture like Sport7, the outcome depends on the settlement of a number of controversies that arise with the establishment of a new actor in an existing business network. In the case of Sport7, the settlement of these controversies appeared to go against this new venture, ultimately leading to the demise of this new TV channel.     

High‐Performance Work Systems and Teachers’ Work Performance: The Mediating Role of Quality of Working Life

This article examines the role of quality of working life (QWL) in the relationships between high‐performance work systems (HPWSs) and employee in‐role performance and extra‐role behavior. Using the data from 1,051 teachers and their immediate supervisors in 63 Chinese schools, we performed multilevel analysis to test meso‐mediation models. The results showed that HPWSs directly and indirectly influence teachers’ in‐role performance and extra‐role behavior through the mediation of QWL. These findings demonstrate that QWL is an important conduit of the relationships between HPWSs and employee work behaviors. The article concludes by discussing the implications for management and future research. © 2014 Wiley Periodicals, Inc.     

Tax Discounting in a High‐debt Economy*

This paper estimates a consumption function for Belgium that allows for government debt discounting and for the overall discounting of the future (reflecting the consumers’ planning horizon or precautionary savings). It also allows for substitutability or complementarity effects from government expenditures. Results suggest that consumers do take into account (future) government activity. Ricardian Equivalence is rejected however, since we cannot reject a relatively short planning horizon or a precautionary savings motive for the consumers. We use bootstrapped distributions for inference since the instrumental variables estimators used may have non‐standard distributions. This procedure also helps to tackle potential endogeneity and sample size problems.