Fair process: managing in the knowledge economy

Unlike the traditional factors of production--land, labor, and capital--knowledge is a resource that can't be forced out of people. But creating and sharing knowledge is essential to fostering innovation, the key challenge of the knowledge-based economy. To create a climate in which employees volunteer their creativity and expertise, managers need to look beyond the traditional tools at their disposal. They need to build trust. The authors have studied the links between trust, idea sharing, and corporate performance for more than a decade. They have explored the question of why managers of local subsidiaries so often fail to share information with executives at headquarters. They have studied the dynamics of idea sharing in product development teams, joint ventures, supplier partnerships, and corporate transformations. They offer an explanation for why people resist change even when it would benefit them directly. In every case, the decisive factor was what the authors call fair process--fairness in the way a company makes and executes decisions. The elements of fair process are simple: Engage people's input in decisions that directly affect them. Explain why decisions are made the way they are. Make clear what will be expected of employees after the changes are made. Fair process may sound like a soft issue, but it is crucial to building trust and unlocking ideas. Without it, people are apt to withhold their full cooperation and their creativity. The results are costly: ideas that never see daylight and initiatives that are never seized.     

Learning in organisations: a corporate curriculum for the knowledge economy

This paper elaborates on the argument that the economy is transforming into a knowledge economy. Therefore, individuals, teams and companies need to develop the necessary competencies to be able to participate in a working life that is mainly based on knowledge productivity. The traditional approaches to management, training and development will not provide the learning environment that is required for knowledge work. Each company should consciously design a corporate curriculum that turns the day to day work environment into a learning environment. The knowledge economy may bring prosperity to those who join the new elite of knowledge workers. Inherently, it also creates new imbalances.     

Complexity and the limits to knowledge

Economies are systems in which the macroscopically observable quantities emerge from the effects of interactions amongst the individual constituents of the system. They exhibit key features of complex systems: short-term non-predictability, emergent properties and multiple possible histories.The conventional approach to the control of the economy at the aggregate level requires the ability to both make reasonably accurate predictions of what will happen in the future in the absence of policy changes and have a reasonably accurate understanding of the impact of policy changes on the economy.Neither of these is the case. There are inherent reasons why the ability to forecast with any reasonable degree of accuracy over time is severely limited, and why the ability to extract information from aggregate time-series data about the ways in which economic variables interact is also restricted.The implication is not that governments should do nothing. The actions of governments clearly do have consequences, for better or for worse. But the conventional way of thinking, which requires a world which behaves like a dependable machine, needs to be abandoned.     

Local Strategic Partnerships,Neighbourhood Renewal,and the Limits to Co-governance

This article analyses the Government's approach to using Local Strategic Partnerships in Neighbourhood Renewal. The Government claims to have established a policy framework that combines co-ordination and co-governance. However, it appears that there is an unbalanced approach to supporting these two aspects. Co-ordination is supported strongly through funding, target setting and the accreditation process, while co-governance has only weak funding and accreditation processes to ensure its success. The authors conclude that the Government is keen to keep control over the levers of regeneration and is therefore more than slightly ambiguous over its espoused aim of encouraging co-governance.     

Local Strategic Partnerships, Neighbourhood Renewal, and the Limits to Co-governance

This article analyses the Government's approach to using Local Strategic Partnerships in Neighbourhood Renewal. The Government claims to have established a policy framework that combines co-ordination and co-governance. However, it appears that there is an unbalanced approach to supporting these two aspects. Co-ordination is supported strongly through funding, target setting and the accreditation process, while co-governance has only weak funding and accreditation processes to ensure its success. The authors conclude that the Government is keen to keep control over the levers of regeneration and is therefore more than slightly ambiguous over its espoused aim of encouraging co-governance.     

The international system : Limits to forecasting

This article describes the obstacles which stand in the way of analysis of the future of the international system and identifies research needs for surmounting them. Such forecasting must be based on an understanding of the structure of the system and its evolution, yet given the heterogeneity of existing paradigms in the study of international relations, it is difficult to give coherent expression to that structure. Progress in forecasting research on the international system therefore implies a lessening of the heterogeneity of those paradigms, and suggestions are made with this end in view.     

The world economy and the German economy in the spring of 1992

The world economy and the German economy in the spring of 1992     

Price Limits and Beta

Price limits, which restrict daily price changes of a stock within a pre-specified range, make the stochastic properties of observed returns deviate from those of true returns, and hence lead to a biased estimates of the market model parameters. To investigate the impacts of price limits on the market model parameters, especially on beta, the restricted regression analysis is performed as well as the two-pass regression analysis used in examining the intervalling effect bias on beta. Empirical results suggest that, when prices are observed within a pre-specified bound, the estimates of beta using ordinary least squares substantially understate the true beta and suffer more from the intervalling effect bias. However, the delay effect of price limits on the adjustment of a security's price does not last too long, that is, remaining information is reflected on the subsequent day's stock prices very rapidly.     

Limits to arbitrage and hedging: Evidence from commodity markets

We build an equilibrium model of commodity markets in which speculators are capital constrained, and commodity producers have hedging demands for commodity futures. Increases in producers' hedging demand or speculators' capital constraints increase hedging costs via price-pressure on futures. These in turn affect producers' equilibrium hedging and supply decision inducing a link between a financial friction in the futures market and the commodity spot prices. Consistent with the model, measures of producers' propensity to hedge forecasts futures returns and spot prices in oil and gas market data from 1979 to 2010. The component of the commodity futures risk premium associated with producer hedging demand rises when speculative activity reduces. We conclude that limits to financial arbitrage generate limits to hedging by producers, and affect equilibrium commodity supply and prices.     

论坛议题三:国际收支与人民币汇率调整经济到价格相对合理的位置

我想讲三个问题。一是讲国际收支问题。最近几年．外汇储备增长很快。2006年突破了10000亿，至2007年9月．已超过14000亿。同时．从2005年7月20日开始的汇率体制改革至今．汇率至今已升值10％左右。汇率升值速度尽管在加快．但汇率升值的压力不是减小．而是增大。     

欲望的尺度

人不可以没有欲望。因为失去欲望就不会有追求,没有了追求,人类就不可能进步。倘若我们的祖先当年没有丝毫欲望,我们至今可能还是一种手脚不分的脊柱动物,天天四脚落地行走于山野之间,风餐露宿于草丛之中,实现不了手脚分离、站立起来的伟大进步。更不可能成为有思想、有创造能力的高级动物,成为居住有屋,出入有代步工具的动物中的衣冠望族。     

The Great Recession: US dynamics and spillovers to the world economy

This paper provides an empirical investigation of both the within-US and international channels of transmission of macroeconomic and financial shocks by means of a 50-country macroeconometric model (estimated over the 1980-2009 period), including measures of excess liquidity and financial fragility, specifically designed in order to evaluate the relevance of the boom-bust credit cycle view put forward as an interpretation of the recent “Great Recession” episode. We find that such a view is consistent with the empirical evidence. Moreover, concerning the real effects of financial shocks within the US, we detect stronger evidence of an asset prices channel, rather than a liquidity channel. Concerning the spillovers to the world economy, we find that while financial disturbances are transmitted to foreign countries through US house and stock price dynamics, as well as excess liquidity creation, the trade channel is the key trasmission mechanism of real shocks.     

税收筹划与避税对宏观经济的影响

企业在追逐利益最大化的过程中,税收负担的轻重直接关系到实得利益的多寡,税收筹划必然成为企业理财工作的重点,但同时避税行为也会相伴而生.这两种极易混淆的活动对宏观经济产生截然相反的影响.     

Driving forces and barriers to a sustainable global economy

The major drivers of globalness are presented here from the perspective of the global economy as an emerging macrosystem. Key driving forces include not only technology, but also ideas and events. Special attention is given to ideas that have created more globalness in recent years and those that may be powerful in the future, and on possible macroevents that could act positively or negatively. Finally some barriers to further globalness are discussed.     

Limits to mutual funds' ability to rely on mean/variance optimization

Our evidence suggests that estimation error in the required statistics is an important factor inhibiting investors' ability to rely on mean/variance analysis. We compare the returns reported by mutual funds to the returns obtained from a mean/variance optimized portfolio of fund holdings. The results suggest that funds tend to outperform the optimized portfolio out-of-sample (when means/variances/covariances are unknown), but under-perform in-sample (when the required statistics in the optimization are known). Therefore, a popular assumption in asset pricing models that investors rely on a basic mean/variance analysis with known underlying statistics is likely to be grossly violated in the case of mutual funds.     

Bank-specific shocks and the real economy

Governments often justify interventions into the financial system in the form of bail outs or liquidity assistance with the systemic importance of large banks for the real economy. In this paper, we analyze whether idiosyncratic shocks to loan growth at large banks have effects on real GDP growth. We employ a measure of idiosyncratic shocks which follows Gabaix (forthcoming). He shows that idiosyncratic shocks to large firms have an impact on US GDP growth. In an application to the banking sector, we find evidence that changes in lending by large banks have a significant short-run impact on GDP growth. Episodes of negative loan growth rates and the Eastern European countries in our sample drive these results.     

Financial contagion and the real economy

This paper studies the spread of the Global Financial Crisis of 2007–2009 from the financial sector to the real economy by examining ten sectors in 25 major developed and emerging stock markets. The analysis tests different channels of financial contagion across countries and sectors and finds that the crisis led to an increased co-movement of returns among financial sector stocks across countries and between financial sector stocks and real economy stocks. The results demonstrate that no country and sector was immune to the adverse effects of the crisis limiting the effectiveness of portfolio diversification. However, there is clear evidence that some sectors in particular Healthcare, Telecommunications and Technology were less severely affected by the crisis.     

Abraham Lincoln and the global economy

Abraham Lincoln would have well understood the challenges facing many modern emerging nations. In Lincoln's America, as in many developing nations today, sweeping economic change threatened older industries, traditional ways of living, and social and national cohesion by exposing economies and societies to new and powerful competitive forces. Yet even in the midst of the brutal and expensive American Civil war--and in part because of it--Lincoln and the Republican Congress enacted bold legislation that helped create a huge national market, a strong and unified economy governed by national institutions, and a rising middle class of businessmen and property owners. Figuring out how to maximize the benefits of globalization while minimizing its disruptions is a formidable challenge for policy makers. How do you expand opportunities for the talented and the lucky while making sure the rest of society doesn't fall behind? It may be helpful to look at the principles that informed the policies that Lincoln and the Republican Congress instituted after they came to power in 1861: Facilitate the upward mobility of low- and middle-income groups to give them a significant stake in the country. Emphasize the good of the national economy over regional interests. Affirm the need for sound government institutions to temper the dynamics of the free enterprise system. Tailor policies to the national situation. Realize that a period of turmoil may present a unique opportunity for reform. These principles drove the reforms that helped Americans cope with and benefit from rapid technological advances and the fast integration of the American economy in the nineteenth century. They may be instructive to today's policy makers who are struggling to help their own citizens integrate into the fast-changing global economy of the twenty-first century.     

Illegal immigration and the shadow economy

We build a model in which both illegal immigration and the size of the informal sector are endogenously determined. In this framework, we show that indirect policy measures such as tax reduction and detection of informal activities can be used as substitutes for border enforcement, in order to counteract illegal immigration. We also find that a welfare-maximizing government will set the tax rate to a lower value, if it includes illegal immigration in its objective function, instead of focusing on the well-being of native workers only.