Economics,economists, and public policy☆

This article examines the role of economics and economists in shaping public policy by, first, examining the employment of economists in government, academe, and the private sector. In the United States, only a minority of Ph.D. economists (about 12 percent) are employed in government, and several important departments of the federal government employ few economists. The article goes on to illustrate the pitfalls that economists face in assisting and advising with public policy by examining the adoption of statistical profiling in Unemployment Insurance. The article concludes that, if the economics profession and economic research are to be effective in shaping public policy, then academic economists must become more directly involved with policy makers in government and decision makers in business.     

What do you value? Examining gendered responses to appeal letters

This study builds on previous inductive analysis of fundraising professionals' choices in writing acquisition letters. Fundraisers often write in a way that aligns with one of two personal values, either foregrounding aspects of self-transcendent Universalism values (an appreciation for community and the welfare of all people) or of conservation Security values (those of personal safety and stability for close others). Previous research also indicates that while women and men have different donation styles, targeted motivating language has yet to be explored. Using a national sample, this research tests public response to letters written for a fictional children's charity using content aligned with each option separately, and combined, compared to a control version. Using an experimental dictator game, Universalism values are found to be negatively related to giving across the board as compared to the valueless treatment. We find no statistically significant improvement in donor responses to acquisition appeals that choose to highlight either Universalism or Security values between men and women, although men were marginally less responsive to Universal, self-transcendent values language. The discussion attempts to make sense of these results and the possible complications of running a donor acquisition campaign in the time of COVID-19.     

You do not have to succeed,just do not fail: When do soccer coaches get fired?

This article deals with circumstances leading to the dismissal of a soccer coach. The article is based on results from the Premier League in England over 12 consecutive years. In this paper, we converted the scores of matches (win, draw, and loss) into an index based upon how results were perceived by club owners—those empowered with the decision as to whether or not to fire the coach. The index is based on the difference between the actual and expected results reflected by betting odds. We conclude that to ensure job preservation, the manager does not have to succeed—he just must not fail.     

What makes a good conference? Analysing the preferences of labour economists

Conferences are an important element in the work of researchers, requiring substantial investments in fees, travel expenses and the time spent by the participants. The aim of this paper is to identify the preferences of participants with respect to conference characteristics. Based on a sample of European labour economists, preferences are measured using the vignette approach where participants are asked to choose between hypothetical European Association of Labour Economists (EALE) conferences. We find that the keynote speakers are the most important element in the preference for a conference, followed by the location of the conference. There is substantial heterogeneity in the taste of labour economists especially with respect to location, though the link between preference parameters and measured characteristics like gender, age and seniority is limited. Factor analysis suggests that the variety in preferences can be best described by a latent variable that reflects the weights people put on content versus fun.     

What do professional forecasters actually predict?

This paper studies what professional forecasters predict. We use spectral analysis and state space modeling to decompose economic time series into trend, business cycle, and irregular components. We examine which components are captured by professional forecasters by regressing their forecasts on the estimated components extracted from both the spectral analysis and the state space model. For both decomposition methods, we find that, in the short run, the Survey of Professional Forecasters can predict almost all of the variation in the time series due to the trend and the business cycle, but that the forecasts contain little or no significant information about the variation in the irregular component.     

Empowered to do what? Why?

This article reviews an approach to leverage business process reengineering and employee empowerment for not only cycle time and cost reduction opportunities, but also a more exciting and expanded role for the employee. It promotes the reduction of simple, routine tasks, and refocusing the improved skill level of today's employees on higher value adding activities.     

What are the effects of fiscal policy shocks?

We propose and apply a new approach for analyzing the effects of fiscal policy using vector autoregressions. Specifically, we use sign restrictions to identify a government revenue shock as well as a government spending shock, while controlling for a generic business cycle shock and a monetary policy shock. We explicitly allow for the possibility of announcement effects, i.e., that a current fiscal policy shock changes fiscal policy variables in the future, but not at present. We construct the impulse responses to three linear combinations of these fiscal shocks, corresponding to the three scenarios of deficit‐spending, deficit‐financed tax cuts and a balanced budget spending expansion. We apply the method to US quarterly data from 1955 to 2000. We find that deficit‐financed tax cuts work best among these three scenarios to improve GDP, with a maximal present value multiplier of five dollars of total additional GDP per each dollar of the total cut in government revenue 5 years after the shock. Copyright © 2009 John Wiley & Sons, Ltd.     

Why do statistics journals have low impact factors?

In this paper, we answer the question why statistics journals get lower impact factors than journals in other disciplines. We analyze diffusion patterns of papers in several journals in various academic fields. To obtain insights into the diffusion of the citation counts of the papers, the data are analysed with the Bass model, leading to values for the time-to-peak that can be used to compare the speeds of diffusion paper citations of the different disciplines. Estimation results show that for statistics journals, it takes significantly more years to reach their peak. To further investigate diffusion, we also compute the percentages of the total number of citations a paper has after 2 or 3 years. Again, it appears that statistics journals have slower citation diffusion than journals in other disciplines. We conclude with some suggestions to reduce this disparity.     

What do scientists know about inflation hedging?

In this article, we give an overview of the state of scientific knowledge on inflation hedging. Specifically, we distill the results of several decades of research analysing the relationship between major asset classes (common stocks, gold, fixed income securities, real estate) and inflation. Even though previous studies have brought forth important facts characterising the interplay of asset returns and inflation rates (e.g., time-dependency, asymmetry, outlier-sensitivity and a tendency towards long-term but limited short-term inflation protection), there is still no consensus on the subject because sample, data and methodology issues preclude strict comparison of most studies. Thus, from a synthesis of the insights gained from our review, we also outline possible directions for future research that may help to establish consensus among researchers.     

What have we learned from the Smart Machine?

Zuboff's (1988) book In the Age of the Smart Machine: The Future of Work and Power is one of the most celebrated texts among Information Systems researchers. Despite its significant influence, I suggest that it may have a richer story to tell than has been told to date. Motivated by this potential, my essay has two aims: to explicate the theory developed in Zuboff's text, and to determine how fully it has been used and extended by Information Systems researchers, through an analysis of papers citing her text. My findings show that the theory developed in Zuboff's text has been used in a fairly limited and piecemeal fashion. I discuss how this presents a significant opportunity for research because the theory appears to be just as relevant now as it was when the text was published.     

Do project managers' leadership competencies contribute to project success?

This article explores the following hypothesis: There is a statistically significant relationship between a project manager's leadership competencies and project success. Two proven questionnaires, the leadership dimensions questionnaire (LDQ) and the project success questionnaire (PSQ), were used to gather data from 52 project managers and project sponsors from a financial services company in the United Kingdom. The results from the LDQ and PSQ are presented in this article. A factor analysis of PSQ revealed three independent factors: usability, project delivery, and value of output to clients. The last factor is not related to project leadership or management, so the article concentrates on correlations between the other two factors and project leadership. Eight separate leadership dimensions were found to be statistically significantly related to performance, so the hypothesis was largely supported. Identifying such relationships provides managers with guidance on possible selection and project improvement models, whereby increased capability in leadership dimensions can lead to increased success in project management.     

What do We Know About Investment Under Uncertainty?

Recent theoretical developments relating to investment under uncertainty have highlighted the importance of irreversibility for the timing of investment expenditures and their expected returns. This has subsequently stimulated a growing empirical literature which examines uncertainty and threshold effects on investment behaviour. This paper presents a review of this literature. A variety of methods have been used to investigate the empirical implication of irreversibility in investment, the majority focusing on the relationship between investment flows and proxy measures of uncertainty. A general conclusion is that increased uncertainty, at both aggregate and disaggregate levels, leads to lower investment rates. This suggests that there is an irreversibility effect, under which greater uncertainty raises the value of the 'call option' to delay a commitment to investment. This effect appears to dominate any positive impact on investment arising from the fact that greater uncertainty, under certain circumstances, increases the marginal profitability of capital. The methods used raise a number of issues which call into question the reliability of the findings, and these are addressed in the paper. However, if such irreversibility effects are present, then their omission from traditional investment models casts doubt on the efficacy of such specifications. JEL Classification: D81, D92, E22     

Should employment policy making be entrusted to regions?

This paper argues that decentralizing macroeconomic policy may be undesirable from the national welfare standpoint. When the objective of each local government is to maximize the welfare of its own residents, while taking the policy choices of the national and other regional governments as given, then the type of equilibrium which results is shown to be Pareto dominated by the centralized solution. This argument is illustrated with a policy of employment subsidy.     

What do indebted employees do? Financialisation and the decline of industrial action

While isolated episodes of work stoppages keep occurring, aggregate industrial action rates have been on the decline over the last five decades. Attempts to explain this trend centre on the short-term effects of the business cycle and the long-term impacts of labour market liberalisation, deindustrialisation and globalisation. This paper argues that household indebtedness is a missing piece of the puzzle. Since indebted employees tend to become self-disciplined at the workplace on the fear of losing their job and defaulting, this paper argues that the post-1970 rise of household financialisation is associated with the decline of strike activity. The econometric evidence reported provides strong support to this argument for the cases of Japan, Korea, Sweden, the United States and the United Kingdom over the period 1970–2018.     

What about the leader? What should the Hungarian Prime Minister do after he lied?

This article shows how text analysis is used to investigate the role leadership characteristics (in the sense of how to behave) play in the media before and after a political leader has taken care of an event that has shocked a substantial part of the population in his country. Here this is a lie by the Hungarian Prime Minister that became public in September 2006. It turns out that after the event took place the leader has to demonstrate vision and has to keep or gain trust from the people.     

Do UK charities have a lot to learn?

This article discusses the key findings of some recent research carried out into the application of market segmentation in the UK charity sector. 410 of the top performing charities (as ranked by income from voluntary donations) were surveyed to profile their major donor groups. Respondents were also asked to indicate how this data was used for fund-raising purposes both in terms of new donor recruitment and existing donor development. The findings show that with the exception of a very few large organizations, the UK charity sector still has much room for improving the sophistication of its fund-raising techniques.     

What makes businesses commit to nature conservation?

To halt the loss of biodiversity and ecosystem services, various actors including companies need to engage, but it is not yet clear what drives voluntary business commitments. We explore leverage points that might increase corporate action for conservation. We apply a structural equation model based on the theory of planned behaviour to analyse data from 618 German companies, collected through an online-survey in 2019. We show that a favourable attitude, driven by perceived business relevance and benefit prospects, fosters engagement. Perceived difficulties, such as lacking finances and knowledge, hinder the engagement. Customers, employees and the general public are presently the only stakeholder groups that drive corporate conservation engagement. Nevertheless, the expectation levels of virtually all stakeholders were found to be quite low and as such inadequate for the ecological crisis we face. We discuss how political will and goal setting can encourage more widespread business support for the natural environment.     

What effect does uncertainty have on the length of labor contracts?

The literature on duration of explicit labor contracts has suggested that increased uncertainty should be associated with shorter labor contracts. More recently, it has been argued that the effect of uncertainty on contract duration depends on the type of uncertainty involved. Specifically, if the uncertainty pertains to aggregate real shocks, then contract durations should increase as workers seek to insure themselves against the repercussions of such shocks. Using a sample of 1876 labor contracts signed during the period 1977–1988, this paper provides an empirical test of the foregoing hypothesis (known as the efficient risk sharing hypothesis). The paper presents results from estimation of a generalized-probit, simultaneous equation model, in which the dependent variables are contract length, indexation of the contract through a cost-of-living allowance, and the rate of wage change specified in the contract. The empirical findings confirm the efficient risk sharing hypothesis.